HC Deb 18 February 1986 vol 92 cc287-94

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sainsbury.]

10.7 pm

Mr. David Gilroy Bevan (Birmingham, Yardley)

I am obliged that I have been fortunate enough to be able to have an Adjournment debate on one of the most vital industries in the heartland of Britain, in Birmingham. So far, there has been no debate on the machinations that have affected the car factory near my constituency. I make a declaration of interest in PPG Industries, but I am nevertheless more concerned to make a declaration of interest on behalf of the numerous members of my constituency who work either in Freight Rover or in Range Rover. Probably over 60 per cent. of the work force actually resides in Yardley.

I shall briefly refer to the construction of the Land Rover Leyland Group. It comprises Leyland Vehicles Limited, Land Rover Group and LRIH which is a company dealing with international matters. Land Rover Group includes Land Rover and Freight Rover. I am not concerned about Leyland Vehicles, the heavy group. The truck division is reputed to have accumulated losses of £500 million. However, it is worth noting that General Motors may not just be interested in Land Rover, Range Rover and Freight Rover as sweeteners. However, it may be interested in the truck division so that it can get its hands on Scammell, which is a subsidiary of Leyland Truck.

Mr. Robert Atkins (South Ribble)

Will my hon. Friend accept that in Leyland Truck as well as in Leyland Bus uncertainty and lack of information is causing most of the aggravation to the work force?

Mr. Bevan

I agree. I shall deal later with the bus division.

Through its Scammell subsidiary, the truck division is one of the two companies that has put in tenders for the £120 million defence order that is shortly to be issued by the Ministry of Defence for rapid fire rocket launchers, which will be able to serve up at a collossal rate of fire power the ammunition needed for those fire launchers. That might be the entrée for General Motors, which is an excellent American company. That might be the real reason why General Motors is trying to get the 1 billion dollar order that may be forthcoming from the Pentagon for similar rocket launchers at a later date. If that is its strategy, it means that it is not intent upon obtaining Land Rover as a sweetener. If that is its intent, we must look at it again.

There are 8,500 people involved in Land Rover, the majority of whom are from Yardley. There are 1,700 people at Freight Rover. The Land Rover factories—14 throughout the United Kingdom—were located as far away as Cardiff. They are now centred upon Lode Lane, Solihull, a few hundred yards over the boundary. All that they have bequeathed to Yardley, Acocks Green and Tyseley are eight empty, old factories.

I do not object to that move, because it did not adversely affect the employment of my constituents. However, their future needs to be assured. Their concern has been expressed to me during the several visits that I have made to factories in the area, on tours in the area and by letters. Their concern is not merely for themselves. They want to continue to work for what they consider to be a unique British manufacturing company in the case of Land Rover and Range Rover.

The only active factory that is left in Yardley—those eight plants having been bequeathed to the Lode Lane complex where they are rationalised into one unit and are able to compete and take orders from the rest of the world — is BL Technology. It is worth looking at Freight Rover. It is located in Common Lane. Again, that is not in my constituency but the constituency of the of the hon. Member for Birmingham, Hodge Hill (Mr. Davis). It is interdependent. Land Rover supplies the engines and the gear boxes: the 3.5, the two litre diesel and the 77 mm gearboxes. Freight Rover supplies Land Rover with the pressings, which is another interdependency. Austin Rover supplies the engines and the axles. Perkins now supplies a diesel engine. There is, therefore, an interdependency in the estalishments.

It is not true to say that there is vast overproduction in the Land Rover and Range Rover side of the business. There is none. Not a single vehicle is kept in stock. Every vehicle that is made by Range Rover and Land Rover is sold, so there is no stock piling. In the rapid growth market to which I refer, which is the four wheel drive market throughout the world, we must note with apprehension that General Motors, which has a shopping list at its disposal and which is reputed to have some £5.77 billion to spend in buying companies, and only a fortnight ago bought the "Lotus" company, also owns 35 per cent. of Isuzu, a four-wheel drive light truck manufacturing business which has doubled its turnover in the Last year, and is selling well. Freight Rover with its particular vehicle, the Sherpa, has 13.9 per cent. of the market. a sizeable percentage and far bigger than the figure to which my right hon. Friend the Prime Minister referred on television last night of 4 per cent. for the whole industry in Europe.

Mr. John Mark Taylor (Solihull)

In the context of the Prime Minister's interview last night, in which she referred to the virtue of wider share ownership, does my hon. Friend not consider that, with its recovery plan well advanced, floating Land Rover on a management buy-out with employee participation might even now represent an opportunity to achieve wider share ownership?

Mr. Bevan

Indeed, I welcome it. I would have thought that my hon. Friend has seen a paragraph which I intended saying later in my speech. His pre-emption, however, is welcome. Of course I consider that that would be a reasonable option, and one which is after all encouraged in almost every theatre of operations.

In regard to the shipyards which will be privatised later this year, if that is the option chosen, in regard to its operations it will consider a management buy-out with management, the work force and the investors all comprising part of such a buy-out.

What I object to—I do this as an erstwhile surveyor and one who carried out many estate deals prior to my coming to this place, with many qualifications, dare I say, for doing so —is what I consider to be quite the wrong way of negotiating the sale of this or any other business is to do it in secrecy, to do it behind closed doors and to do it with merely one other customer in pre-determined mind. That is no way to create a deal, that is no way to excite the best figure from the market. It is so extraordinary that, following the leak of this particular matter, the tree is being shaken and down from the branches of that tree come purchasers, and every day that continues like falling leaves on the industrial greensward below.

More and more we are told that Lonrho is now interested. We are told that Aveling Barford is interested, a previous subsidiary of BL. We are told tonight that three other firms are interested, although I do not know which firms they are. But the more we know about the matter, the more interest there will be. It would be wrong to announce at this stage, having treated in secret with a predetermined purchaser, that the omelette must be served up by Easter. A very addled egg will be delivered if this time limit is put upon it.

We must ask—why all the rush? We have invested £2 billion in the company, as the Government are always kind enough to remind us. The Government have no money. They have only the people's money and, therefore, they have invested taxpayers' money in this ingredient and act as trustees. They must get a decent yield from that investment. The Government are not considering, are they, taking back any portion of the £1.6 billion that they have invested in the form of guarantees, letters of credit or the agreements that have been mentioned? There is no suspicion of that. Therefore, normally one would have asked that time be allowed for the reformation and rationalisation of Land Rover so that it can produce its supurb new models—the 90 and 110 versions of the Land Rover and the Vogue version of the Range Rover, which goes faster, which has a fifth gear, and which is an excellent vehicle for the markets of north America. I understand that an organisation of about 60 distributing agents is about to be appointed. Since there cannot now be time for that to happen, let us privatise if we must, but let us privatise to the best British buyer, in which the people can take a shareholding.

Mr. Roger King (Birmingham, Northfield)

My hon. Friend has explained why General Motors would be interested in Land Rover and Range Rover, but why on earth is it interested in Freight Rover? That company shares a factory with Austin Rover, obtains its components from Austin Rover, sells its products to Austin Rover, and produces a range identical to that produce by General Motors. Could it be that General Motors wishes to buy it simply to close it down?

Mr. Bevan

That is the fear of my constituents.

Yesterday, my hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) said that the people of Luton would be happy to see such an arrangement between General Motors and British Leyland. That is precisely why the people of Birmingham are unhappy. They want the British flag to continue flying over their enterprise. They know that Bedford Trucks is about to announce a loss of about £120 million. As my hon. Friend the Member for Birmingham, Northfield (Mr. King) said, the ranges are identical. The people of Birmingham foresee possible doom and eclipse if the matter continues.

The bus business is different. In a previous existence, as chairman of the West Midlands passenger transport authority, I ordered buses from British Leyland and Metro Cammell at £7 million a time, but that is no longer possible. The grant has gone, and there has been privatisation and all sorts of things, including delicensing, have taken place. I would be happy for the bus division to go to Laird where there is a natural home of it at Metro Cammell, but not this.

Mr. Terry Davis (Birmingham, Hodge Hill)

Will the hon. Gentleman give way?

Mr. Bevan

I am afraid that I must deny the hon. Gentleman an intervention.

Land Rovers and Range Rovers are individually crafted as no other vehicle is. We know that 70 per cent. of models produced are exported. There was a 40 per cent. increase last year in exports to Switzerland and a 10 per. cent. increase to Europe. The vehicle, with its immense potential, is about to be sold off in a shotgun wedding as a bartered bride. We ask that the marriage banns be given time to be read properly so that the names of the suitors can be understood, and that our belief in the factory be allowed to continue with the British flag above it and not struck, as the flag over Fort Dunlop has been, and not even as the flag over Westland has been.

10.24 pm
The Minister of State, Department of Trade and Industry (Mr. Peter Morrison)

I am more grateful than usual that my hon. Friend the Member for Birmingham, Yardley (Mr. Bevan) has had the opportunity to discuss the future of Range Rover, Freight Rover, and Land Rover. I gather that there was a little local difficulty earlier today about possible developments on the future of British Leyland as a whole.

We have had a very busy day in the Department of Trade and Industry. We have had a lot of discussions about the future of BL. Indeed, as my hon. Friend the Member for Solihull (Mr. Taylor) will remember, we had earlier today a delegation composed of trade unionists from Range Rover and Land Rover, and members of the local council. We discussed the future of Range Rover and Land Rover at great length. Despite the fact that we have had a busy day discussing the future of BL, since my right hon. Friend the Secretary of State made a statement yesterday afternoon in answer to a private notice question, there have been no new developments.

I listened carefully to my hon. Friend the Member for Yardley. I am aware that the future of Land Rover (UK) has been argued and discussed in the west midlands and the country as a whole. It has been discussed publicly and privately, with conviction and cogently. As my hon. Friend the Member for South Ribble (Mr. Atkins) said, the present uncertainty is bound to be a worry. I disagree with my hon. Friend the Member for Yardley in that I do not think that it would be sensible for that uncertainty to go on and on. Keeping the future shrouded in mist would cause serious anxieties among employees and be bad for the future of the businesses.

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

We are all sympathic about the busy day that my hon. Friend has had. Will he forgive me if I say that we are even more sympathetic about the busy days that lie ahead of him? Before he concludes those busy days, will he give the House one pledge, that before he closes the chapter on this lamentable affair, before he agrees on what will happen to Land Rover and British trucks, and before any agreement is signed the House will, bearing in mind the importance of the issue, debate it before ink is put to paper? That would satisfy many of us, and we would go to bed happy after our busy day as well.

Mr. Morrison

I know that my hon. Friend is a very busy man. We have known each other for 20 years. My right hon. Friend the Secretary of State has made it quite clear that, when any announcement of anything concrete is to be made, it will be made to the House and it will be debated. I quite appreciate what my hon. Friend has just said.

Mr. Terry Davis

Will the hon. Gentleman give way?

Mr. Bevan

May we therefore discount the statement that my right hon. Friend the Secretary of State made yesterday in the House that he would inform the House when negotiations had been concluded? That is not enough, as my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) has pointed out.

Mr. Morrison

My hon. Friend will appreciate that my right hon. Friend the Secretary of State is not using the House as a negotiating House. Obviously negotiations will take place with all the separate parties, whether GM or other parties. When a conclusion to negotiations is reached my right hon. Friend will immediately make a statement to the House and he will accept that it will be for the House to debate and decide upon the result of those negotiations.

Mr. Terry Davis

We are dealing with a serious point. What is of concern to hon. Members on both sides is that there should be a debate in the House after negotiations have been concluded but before anything is signed, sealed and sold off. We are anxious not just to know the result of negotiations but to have an opportunity to debate the result before the matter is finally signed. The hon. Gentleman should go a little further—as his right hon. Friend did not do yesterday —and give us that assurance.

I should like two other assurances. [Interruption.] These are important matters for my constituents who work at Freight Rover. Will the Minister follow up the assurances given yesterday by his right hon. Friend about consulting the people who work at Land Rover and Freight Rover and give us an assurance tonight that they will be consulted before anything is signed, sealed and delivered so that the House may debate the issue in the knowledge of what the people who work in the companies want?

Will he also make sure that in the negotiations a legally enforceable undertaking is sought that production of Sherpa vans will not be removed from Washwood Heath and production of Land Rovers will not be transferred from Solihull to Spain?

Mr. Morrison

On the first point, the hon. Gentleman and I came to the House on the same day and I have always understood that the House was sovereign; the House has total and complete control over what happens. If the House decides to go in a particular direction, that is the decision of the House.

On the hon. Gentleman's last point, I understand from his constituency point of view why he raises it, but it would be totally misleading of me to make any predictions about what may happen because at this stage I do not know what deal there may be with whom, albeit I have accepted that the deal with General Motors is further down the course than the others. In those circumstances, he will understand that I cannot commit myself. I understand the crucial and important point that he has made on behalf of his constituents.

In the few seconds which are left, may I talk about the future of Land Rover, Range Rover and Freight Rover? Of course, they are all crucially important, but my right hon. Friend and I have to consider them in the context of the vehicle industry as a whole. Land Rover, Range Rover and Freight Rover comprise one of the many jewels in the crown of the west midlands. But I hope that the House will appreciate that tens of thousands of jobs are dependent upon foreign car manufacturers. Ford, General Motors and other car manufacturers are established vehicle manufacturers in this country. To a great extent, in some cases to a major extent, they source from United Kingdom component suppliers.

My hon. Friends from the west midlands should remember that in west midlands terms it is dangerous industrially and politically to appear to be anti-American. If we appear to be anti-American the business and jobs that come with American investment may be driven away. [Interruption.] The shadow Secretary of State for Scotland, the hon. Member for Glasgow, Garscadden (:Mr. Dewar), knows perfectly well that there is a substantial number of jobs in the Scottish economy thanks to American investment, as is the case in other parts of the United Kingdom.

I hope that all hon. Members agree that the Government's policy must be directed towards a competitive United Kingdom based commercial vehicle industry. We have to decide on the future not just of Land Rover and Range Rover, but of Freight Rover, Leyland Trucks and Leyland Bus. My hon. Friend the Member for South Ribble knows Leyland Bus very well. That company is not part of any potential deal with General Motors and can be set aside for the purposes of this debate. Nevertheless, it is crucial that solutions are found for the bus industry, too, and those solutions will not be easy to find.

I think it is accepted that there is over-capacity in the truck industry, and some people say that in Europe that over-capacity is 40 per cent. For that reason, if we are to maintain a competitive truck manufacturing industry, we cannot stay precisely where we are. We have to ensure that the truck industry becomes more efficient to meet the demands of the market place. If it does not become more efficient, we have to accept the fact that it could disappear.

My hon. Friend the Member for Yardley raised, as he did last night when he came to see me, the defence implications. I assured him last night that we are satisfied about that. I accept that Freight Rover has been successful over the past few years, and that has been due to the good work of the management and the work force. The problem with the van industry is not dissimilar, and if we did not look properly at the problem we would be courting potential disaster for the whole of the industry in the United Kingdom.

I accept entirely the points made by my hon. Friend about Freight Rover. I hope that he will accept that it is right to look at the industry as a whole. Strong arguments were advanced in favour of retaining Land Rover, Range Rover as an independent United Kingdom company. My hon. Friend the Member for Yardley and several of my hon. Friends have made that point. Management buy-out is talked about. I understand that. I was brought up in the back of a Land Rover, and as the youngest son I still sit in the back of a Land Rover, so I know about the Union Jack flying over Land Rover. But we have to look at the long-term future, and I would like my sons and grandsons also to be brought up in the back of a Land Rover. The important—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-three minutes to Eleven o'clock.