British Leyland (Hansard, 5 November 1986)

§ 7. Mr. James Hamilton
asked the Secretary of State for Trade and Industry what is the state of the Government's proposals for the privatisation of British Leyland.

§ Mr. Channon
The position on Leyland Bus and Unipart was announced to the House on 24 July. Since then, Rover Group has announced agreement in principle to dispose of a majority interest in Jaguar Rover Australia. It is also taking forward the disposal of a majority interest in ISTEL.

§ Mr. Hamilton
Will the Secretary of State give some security and peace of mind to British Leyland, its workers, dealers and its customers, by giving an assurance that there will be no negotiations before a general election about the sale of British Leyland or, for that matter, Land Rover?

§ Mr. Channon
There are no such plans. I explained the position on Land Rover some months ago, and there is no change in that position. I have already explained what is happening in a number of subsidiaries of the Rover Group. Our policy remains to seek to return the businesses, together or separately, to private ownership. I am awaiting a report from Mr. Day on the financial structure of the company. I have nothing to tell the House beyond that.

§ Mr. Madel
Whether British Leyland is or is not privatised, will my right hon. Friend assure the House that the Government will not allow it to engage in unfair competition with existing car and truck manufacturers in this country?

§ Mr. Channon
Yes, I can give my hon. Friend that undertaking. I well understand his concern about events in his constituency.

§ Mr. Terry Davis
How will privatisation help to solve British Leyland's real problem, which is a sales problem? When will the Secretary of State ask the directors of British 946 Leyland to do something about the failure of the company's sales and marketing management to sell the vehicles that they are employed to sell, instead of constantly calling for redundancies among the men and women who work in the factories, who have significantly improved both quality and productivity and who are then rewarded with the sack?

§ Mr. Channon
The hon. Gentleman is being most unfair and unreasonable, which is not typical of him. I have asked Mr. Day to do his utmost to try to improve the commercial performance of the Rover Group, which is in everyone's interests. The group is making considerable strides in quality, production and output, and is doing extremely well. I am asking Mr. Day to look at the whole commercial future of the Rover Group and I look forward to receiving his proposals. I am sure that they will be received enthusiastically by the hon. Gentleman.

§ Mr. Beaumont-Dark
Do the privatisation plans that have been announced mean that the money that will then be released will be available for reinvestment in the Rover Group, bearing in mind the excellent new car — the Sterling—which has a splendid future if it has the right investment, for which Mr. Day is asking?

§ Mr. Channon
All questions about investment in the Rover Group will have to await Mr. Day's report. I am naturally in agreement with my hon. Friend about the quality of the Rover Group's cars and I only wish that more people, both inside and outside the House, would buy them.

§ Mr. Nellist
How seriously can we take the Secretary of State's list when the privatisation from British Leyland of Self-Changing Gears in Coventry took place in June without any announcement to this House until it was squeezed out of the Secretary of State in a written answer? Despite promises about the safety of the company in the harbour of Cummins Engines, within 12 weeks of privatisation 20 per cent. of jobs were lost. How seriously can we take the list when that sort of thing happens?

§ Mr. Channon
Surely all hon. Members know that in order to stay in business a firm has to win sufficient orders. It is unfortunately the case with Self-Changing Gears that its failure to win sufficient orders resulted in job losses.

§ Mr. Forth
Can my right hon. Friend give me assurances about the proposals for ISTEL in my constituency? Will he assure me that sufficient weight will be given in considering the management buy-out proposals to the strength of the skills of the existing staff and that those skills will be fully weighed against any financial considerations which might otherwise be considered alone?

§ Mr. Channon
As I told the House, I am awaiting the assessment from the Rover Group of its majority interest in ISTEL. I will, of course, bear in mind what my hon. Friend has said.

§ Mr. Hoyle
Will the Secretary of State please confirm that the instructions given to Mr. Day are to talk to everyone with a view to privatising Austin Rover? Why are the Government in such a hurry to sell off an indigenous car manufacturer? Do they not want a British stake in the motor industry, and are they not worried about the loss of jobs?

§ Mr. Channon
The hon. Gentleman is misleading the House, I am sure unintentionally. The instructions given to Mr. Day are to run this company commercially and to get it into a good commercial state in the interests of all concerned. The Government were elected with a manifesto commitment to privatise the group and our policy remains to seek to return the businesses, together or separately, to private ownership. No doubt that will take a considerable time.

§ Mr. Budgen
Will my right hon. Friend make it plain to private investors that he is genuinely open to all suggestions for the sale, investment or collaboration in respect of British Leyland and that he is not merely marking time until the next general election?

§ Mr. Channon
My hon. Friend will realise from the list that I read to the House of the parts of the Rover Group that are being disposed of that an energetic programme is proceeding on that front. I am sure he welcomes that, and I endorse what he said.

§ Mr. John Smith
The Government caused deep worry to everyone in the Rover Group when their surreptitious proposals to sell it off to the Ford Motor Company were revealed earlier this year. In view of that, do the Government not owe to the people who work for the Rover Group a solid commitment to see it through to commercial success? Is it not more important to maintain and expand its production than to seek to privatise it? Will the Secretary of State give the House an undertaking that if proposals by Mr. Day are to reduce substantially the volume of production in the Rover Group he will reject those proposals?

§ Mr. Channon
I had better wait to see what Mr. Day says before I commit myself to reject or accept anything that he puts forward. I do not agree with the right hon. and learned Gentleman about a surreptitious attempt to sell off the Rover Group or the effect that such a thing would have on the commercial future of the group. The Rover Group, and other car companies in Britain, must depend for commercial success on quality, price, reliability and delivery. Rover has an excellent story to tell on those points and I hope that it will achieve commercial success, because that is the Government's policy.