British Leyland

HC Deb 03 February 1986 vol 91 cc21-6 3.32 pm

Mr. John Smith (Monklands, East)

(by private notice) asked the Secretary of State for Trade and Industry if he will make a statement about the future of British Leyland Vehicles and possible disposals.

The Secretary of State for Trade and Industry (Mr. Paul Channon)

With the approval of the BL board, discussions are in progress between BL and General Motors with the aim of creating an internationally competitive United Kingdom commercial vehicle industry and improving the long-term prospects for the constituent BL companies. These talks cover Leyland Trucks, Land Rover, Freight Rover and certain related overseas operations. Discussions are at an advanced stage, but a number of important issues remain to be settled Separate discussions are taking place with the Laird Group, which owns Metro Cammell Weyman, about the future of Leyland Bus.

As to the other BL businesses, it remains the policy of Her Majesty's Government to return them to private ownership as soon as practicable. Talks with other car manufacturers on a variety of potential business ventures are in progress; some of them are wide-ranging, but are at an exploratory stage, and it is too early to tell whether they will lead to any potential equity stake, acquisition or merger.

Mr. John Smith

The Secretary of State's statement reveals that discussions are at an advanced stage, but the House has not been told anything until today. Does not that statement confirm the fears expressed by the Shadow Chancellor of the Exchequer, my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), in a speech yesterday in Birmingham? Is it not appalling that the Government are willing even to contemplate the disposal of the largest part of the British truck and bus manufacturing industry to an American competitor? Is the right hon. Gentleman not aware that his predecessor was forced to say on 23 October last year: after lengthy discussions, Vauxhall is not yet ready to go further in proving that it really is a British car producer."—[Official Report, 23 October 1985; Vol. 84, c. 285.]

In that context, is it not naive and foolish to expect that company to preserve any British element in what it acquires? Is there no part of British industry that is safe from the destructive purposes of the Government? Is there nothing that is not for sale? Will the Secretary of State confirm that a team from General Motors is currently in Leyland compiling a detailed dossier of our business? As the purpose of General Motors in buying Leyland would be to buy a market share, or rather to buy out the British market share and get its hands on modern facilities, which have been provided on a publicly financed basis at a cost of £320 million in the recent investment programme, will there not be large job losses in Bedford as well as Leyland? What is the estimate of the number of jobs that will be lost in both Bedford and Leyland?

What will the future be for the Land Rover and the Range Rover? Will not the job lot disposal of these prestigious British products be seen at home and abroad as a dreadful and shameful British retreat? Is it not a sad day when the British Government can even-think of such a thing? If this deal goes ahead, will it not be the case that the British armed forces will have almost no British owned suppliers of the vehicles upon which they depend?

Mr. Speaker

Order. This is a private notice question, not a statement.

Mr. Smith

Can the Government explain why all other countries in western Europe seem to want to stay in this industry but the British Government do not? Can the Secretary of State say what protection there will be for independent British research and development? Is not this episode typical of the Government's industrial policy? It involves the destruction of jobs, the permanent loss of an industry, the loss of independent research and development and the surrender of crucial British interests.

Mr. Channon

No, Sir. I strongly repudiate many of the points that the right hon. and learned Gentleman has raised in his question. As I have already explained, no decision has been reached in the talks between British Leyland and General Motors. When firm conclusions are reached, I shall make a full statement to the House. Were a deal to be reached, General Motors would give full undertakings that the majority—[Interruption.]

Mr. Speaker

Order.

Mr. Channon

I am surprised that on an issue like this the Opposition are not anxious for me to be heard. I am trying to explain these important matters. After what the right hon. and learned Gentleman has been saying, he should be crying, not laughing.

General Motors would be willing to give undertakings that the majority of the products sold by the businesses involved would be manufactured in the United Kingdom, that the products would continue to have a high local content, that there would be a substantial level of exports, that research and development facilities would be maintained and developed in the United Kingdom, that Land Rover would retain its distinct British identity, and that an appropriate level of investment would be injected into the business to achieve competitive future models and facilities.

If these talks were to come off, it would be the Government's aim to ensure that the jobs and the future of Land Rover and these other companies were more., not less, secure. That is what we are fighting for—not for some shibboleth, like the right hon. and learned Gentleman—to try to get a viable industry that will be secure for the future.

Mr. Speaker

Order. I remind the House that private notice questions are an extension of question time.

Mr. David Madel (Bedfordshire, South-West)

I welcome my right hon. Friend to his new post. As General Motors and British Leyland are well established commercial vehicle manufacturers in this country, will my right hon. Friend confirm that it is Government policy to strengthen their manufacturing base? Will he remember that General Motors has a long, distinguished history of supplying first-class defence equipment to this country for this country's needs?

Mr. Channon

My hon. Friend is right in the latter part of his question. He is also right in the first part of his question, and I very much welcome his support.

Mr. George Park (Coventry, North-East)

Is the Secretary of State aware of a recent early-day motion, sponsored by Conservative Members, paying tribute to the efforts of the workers and management of British Leyland? Does he imagine that his announcement will encourage either the workers or the management to make great efforts when they know that the inevitable rationalisation will mean that their jobs are likely to go down the drain?

Mr. Channon

I believe that my announcement, and what may possibly take place, should be—I do not say that it will be—of comfort to the work force. They should realise that their future is likely to be secure in a motor industry and in a truck industry that will have secure futures. Over £2 billion has been pumped into British Leyland during the past few years. We need to ensure that this industry is able to function successfully in the foreseeable future.

Mr. John Carlisle (Luton, North)

I support the words of my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel), on the basis that General Motors is a successful company and that the merger could be to the benefit of British Leyland and it ill befits the right hon. and learned Member for Monklands, East (Mr. Smith), who turned up at Ellesmere Port in a Japanese car to talk to officials of the company, to talk of British content. General Motors has an excellent record in Britain, and I have every confidence that should the merger take place it will be to the benefit of all workers concerned.

Mr. John Smith

On a point of order, Mr. Speaker.

Mr. Speaker

I shall take it later, if I may.

Mr. Channon

I very much welcome my hon. Friend's support, and I am grateful to him for what he said.

Mr. A. J. Beith (Berwick-upon-Tweed)

Does the right hon. Gentleman recognise that one of the duties that he has taken over is that of seeking to ensure that we have a viable British-owned motor industry? What has happened to the Government's philosophy of privatisation? Was it not intended to bring ownership to the employees and to the British people; not to sell off job lots in the American market?

Mr. Channon

I and my right hon. Friends are seeking to create conditions in which the companies about which I have been talking this afternoon will be able to have a more secure future than they have had in the past, and where their people will be able to look forward with confidence to the future of their companies. That is my aim. I would not allow talks to proceed unless I received satisfactory assurances to that effect, and I am sure that I will.

Mr. Iain Mills (Meriden)

Will my right hon. Friend confirm that it is in the the best interests of my constituents who work for Land Rover, the Austin Rover group and Unipart that the alternative to the suggestions that he has made may well be greater public investment, and that the exploration of the sort of co-operative venture that he has suggested would be beneficial to those constituents?

Mr. Channon

Yes, Sir.

Mr. Doug Hoyle (Warrington, North)

Why does the right hon. Gentleman believe that it is so good for the employees that no talks have taken place with the trade unions? Indeed, it has been denied to the trade unions that talks are taking place. What does the right hon. Gentleman mean when he says that the majority of products will be manufactured here? What will be the effect on the component industry, particularly in view of General Motors' poor record on buying components in Britain? Will he confirm that the bus and coach division could go to the wall, with the loss of 1,000 jobs? Does it not prove that in relation to the manufacturing industry the Government are not bothered about running the estate but only with selling the valuables in the manor house?

Mr. Channon

No, Sir. It means no such thing. It means that we are trying to achieve a situation in which the employment prospects and wellbeing of those in the companies concerned will be better rather than worse in the future. If a deal with General Motors were to be reached—and that is by no means certain—I shall have to be satisfied on the point that the hon. Gentleman raised about the majority of the products. We shall need to have a proper understanding about them.

Mr. Patrick Cormack (Staffordshire, South)

Does my right hon. Friend, whom I welcome to his post, think that British shareholders might be interested in the Range Rover and Land Rover, and for the rest could there be a European solution?

Mr. Channon

That is an ingenious idea which my hon. Friend, with his ingenious mind, so typically puts forward. I am convinced that the proposals for Land Rover offer the best possible future, that it could have. It will have extra opportunities in the United States, and that is very much in the interests of Land Rover.

Mr. Terry Davis (Birmingham, Hodge Hill)

What arrangements will the right hon. Gentleman make to consult those who work at British Leyland and Metro Cammell Weyman about their future before their jobs are sold off?

Mr. Channon

I do not accept the premise on which the hon. Gentleman concluded his question. As I have said, discussions are in progress. No decisions have been taken. The House will continue to be kept informed.

Mr. Richard Page (Hertfordshire, South-West)

Does my right hon. Friend agree that the reality of the situation is that there is over-capacity in vehicle manufacturing in the world and that any sale will give the opportunity to broaden the narrow retail outlets, possibly to overseas markets? Will he confirm that manufacturing capacity will be part of the condition of any sale?

Mr. Channon

That is an important point, with which I agree.

Mr. D. N. Campbell-Savours (Workington)

Is this not an example of the Government dropping the Union Flag and raising the Stars and Stripes once again over British industry? Is it not true that this American corporation has made it clear that it does not want the Leyland Bus division? If that is the case, what will be done with it? What is the future of the Leyland plant in my constituency?

Mr. Channon

As I told the House, separate discussions are taking place with the Laird group about the future of Leyland Bus. I should have thought that the hon. Gentleman would welcome that, rather than being so contemptuous about it.

Mr. Michael Grylls (Surrey, North-West)

Does my right hon. Friend remember that the Labour party bitterly opposed the privatisation of Jaguar, which has been an outstanding success, not least for all the people who work in Jaguar? Does it not prove the Luddite attitude of the Opposition, because everybody knows that the future of the motor industry lies in international co-operation? If there is a possibility of a joint venture between British Leyland and a Japanese firm, would we not welcome that as well?

Mr. Channon

My hon. Friend is entirely right, and it is typical of the Opposition today, as so often in the past, that they oppose any attempt to try to solve sensibly some of the serious commercial problems—attempts that are very much in the interest of all concerned.

Mr. Jeff Rooker (Birmingham, Perry Barr)

If the workers of Land Rover and Range Rover and the management said that they would prefer the Jaguar solution, would the Government stand in their way? Why did the Secretary answer yes to the question from the hon. Member for Meriden (Mr. Mills), who said that a better solution to that of the Secretary of State for the job security of the people of the Meriden constituency and others was more public investment?

Mr. Channon

I do not think that I said yes. I shall look at what 1 said, but I think that the hon. Gentleman has misunderstood. [Interruption.] How interesting it is that when the affairs of a great industry such as this are being discussed the Opposition treat them with such frivolity. They are not interested in the future of British Leyland or its Trucks division. All that they are interested in is making petty mischief, as usual.

Dame Jill Knight (Birmingham, Edgbaston)

Is my right hon. Friend aware that the future of scores, if not hundreds, of small businesses in the west midlands depends on their being able to provide parts to British Leyland? May we be certain that that future is being considered in any arrangement to be made?

Mr. Channon

I assure my hon. Friend that the point that she has raised is very much in my mind. I am grateful to her for referring to it again.

Mr. John Smith

On a point of order, Mr. Speaker. In view of an intervention by the hon. Member for Luton, North (Mr. Carlisle), which I fear could mislead people, I make it utterly clear that I own and drive a British car, and have never had nor driven a Japanese car.

Later—

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

On a point of order, Mr. Speaker. Bearing in mind the importance of the BL issue, why did we have such a very short time to ask questions about it? For the entire motor industry and all the people of the midlands, nothing is more important. We waste more time in the House on trivia than we spend on important matters such as this.

Mr. Speaker

Order. I said at the beginning—the hon. Gentleman knows this well—that a private notice question is an extension of Question Time.

Mr. Beaumont-Dark

It is a disgrace.

Mr. Speaker

Order. The hon. Gentleman must not argue with me from the Floor.

Mr. John Carlisle

Further to an earlier point of order, Mr. Speaker. The right hon. and learned Member for Monklands, East (Mr. Smith) said that I had said he owned a Japanese car. To correct the record, what I said was that he visited Ellesmere Port in a Japanese car. Perhaps he would like to clarify that — [HON MEMBERS: "Withdraw"].

Mr. Speaker

Order. That is not a matter for me.

Mr. Andrew Faulds (Warley, East)

On a point of order, Mr. Speaker. Further to the comments of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), may I stress that some of us whose constituents' work is affected by the disastrous statement that we have just had, at the first appearance at the Dispatch Box of the new Secretary of State for Trade and Industry, are entitled to have a chance to ask questions, and not have such a very brief period terminated when there were still many hon. Members on their feet?

Mr. Speaker

The House should understand that a Private notice question, which the Chair grants, is an extension of Question Time.

Mr. David Winnick (Walsall, North)

It was a statement.

Mr. Speaker

It was not a statement.

Mr. Winnick

It should have been.

Mr. Speaker

That is a different matter. It was not a statement. I was asked whether I would grant a private notice question on this matter, and I did so. I think that the House has had a fair run on it. No doubt we shall return to the matter.

Sir John Biggs-Davison (Epping Forest)

Further to that point of order, Mr. Speaker. Is it not the case that we have a very important debate to follow, which must end at 7 o'clock? Therefore, is it not right that we should pass to that debate as quickly as possible?

Mr. Speaker

The hon. Gentleman is absolutely right.