HC Deb 11 July 1985 vol 82 cc1249-51
5. Mr. Michael McNair-Wilson

asked the Secretary of State for Northern Ireland if he will make a further statement about the winding-up of the Lear Fan project.

The Minister of State, Northern Ireland Office (Dr. Rhodes Boyson)

Since the events described in my reply to my hon. Friend the Member for Hazel Grove (Mr. Arnold) on 3 June, the company has filed under the appropriate United States bankruptcy code and the United States courts have appointed an interim trustee to administer the company's assets in the United States.

The receiver appointed by Her Majesty's Government has not yet completed his review and assessment of the assets of the company. Until he has, it will not be possible to estimate how much might be recovered.

Mr. McNair-Wilson

From that answer, should I conclude that something might be salvaged from the company's liquidation? In view of the large sums of public money lost in De Lorean and now in Lear Fan, what lessons can be drawn from these unhappy stories, and in particular how can we improve monitoring the use of public money?

Dr. Boyson

About £4 million was saved through the company going into liquidation at that time. We trust that more will be saved. That money would have been spent if the company had continued to trade.

Mr. Skinner

The old story.

Dr. Boyson

It is a new story as well as an old story, and the hon. Gentleman should listen to the new story. Any Government of any colour investing in Northern Ireland must make two decisions about helping companies from abroad. The first is to assess how much private money is involved or whether it will all come from Government.

Mr. Skinner

Market forces.

Dr. Boyson

If the hon. Gentleman will listen, he will hear about market forces. At first Lear Fan operated largely with Government money, then, for every £2 of private money, £1 of Government money was used. At the end all the money was private. It is vital for more private money to be invested at the beginning of such projects.

We should be careful when dealing with risk enterprises at the frontiers of technology which no one wants to back in their countries of origin. We should look for blue chip companies which already have good products. That is what we want in Northern Ireland.

Mr. Campbell-Savours

Is not the appalling unacceptable embarrassing, unpalatable and terrible truth that violence does pay in Northern Ireland when Governments insist in backing projects such as Lear Fan and De Lorean for which no commercial plan works? Is it not about time that the Government reviewed their policy? Why has the Minister refused, despite repeated requests from the Opposition, to come to the Dispatch Box to make a full statement and to stand hon. Members' questioning? After all, £50 million of public money is involved.

Dr. Boyson

I enjoyed the exercise in adjectives at the beginning of the hon. Gentleman's question. He certainly deserves a CSE grade 1. The answer to the second part of his supplementary question is that much Government money has helped companies, including—in the far past —when the Labour party was last in office. That has continued under the present Government, and about three quarters of new jobs in Northern Ireland last year resulted from the activities of companies owned abroad which had been encouraged by the Government of Northern Ireland to invest in the Province.

Mr. Couchman

Will my hon. Friend reassure the House that, notwithstanding the polemics of the hon. Member for Workington (Mr. Campbell-Savours), his Department will not lose sight of the fact that money will have to continue to be poured into Northern Ireland's industry to regenerate the economy there and to provide the employment which will, more certainly than anything else, take the gunmen off the streets?

Dr. Boyson

I entirely agree with my hon. Friend. It is vital that outside investment comes into Northern Ireland. It is similarly vital that small businesses there should grow, and we shall give every encouragement to that. I remind the hon. Member for Workington (Mr. Campbell-Savours) that a reduction in violence encourages people to invest in the Province.

Mr. Bell

Has the Minister been able to resolve the question whether the assets of Lear Fan Jet, by way of blueprints and plans, are vested in the United States corporation and can, therefore, be developed by another American company, to the detriment of the British taxpayer?

Dr. Boyson

That matter has concerned us all, and lawyers are looking into it. I cannot, therefore, give the hon. Gentleman a straight yes or no answer. It has been obvious for some time that the patent rights are ours and will be for a time. As soon as I can give the House a definitive answer on that, I shall be delighted to do so.

Rev. Ian Paisley

Is the hon. Gentleman happy about the role played by the nominees of the IDB on the boards of such companies? Surely, if these men are doing their work properly, they can raise the alarm sooner about companies going wrong.

Dr. Boyson

There were two nominee directors on the Lear Fan board, appointed by the Government through various Departments. Warnings were given. However, if we had pulled the skids from under Lear Fan and not put the money in, we could have been sued because there was a tight agreement for every penny. We could also have been sued for breaking our word, and that could have cost us a lot more. We were warned about that and we told the directors about it. Eventually the decision was made by the company to cease trading, and that saved us much more money than would have been the case had we come out and had to pay for nothing at the end.

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