HC Deb 11 March 1987 vol 112 cc385-409

Question again proposed, That the amendment be made.

10 pm

Mr. David Madel (Bedfordsire, South-West)

This is a timely debate that reflects the improvement and optimism in the motor vehicle industry after many years of difficulty. The increased optimism is encapsulated in an article in The Sunday Times last Sunday which, referring to the Geneva motor show, states: British car executives were confirming plans for large increases in output from their British plants.

I share much of the optimism that has been expressed in the debate. Hon. Members referred to the better industrial relations and the disappearance of bad practices in the industry. I also hope that, once and for all, we have seen the back of violent changes in taxation, which led to layoffs in the 1960s and 1970s at very short notice. One could never get a car work force on one's side, if, from year to year, there were sudden changes in production caused by violent changes in taxation. Stable production and tax rates do much to improve industrial relations, just as much as the many things that have been mentioned in the debate.

A major constituency worry for me relates to the prospects for Bedford Commercial Vehicles Ltd. in relation to the military contract. We know that 1986 was of great depression and difficulty in Bedfordshire once the General Motors and Leyland Trucks negotiations broke down. In 1986, hundreds of Bedford workers lost their jobs. There has been a bad start to 1987, with Bedfordshire county council— which is not Conservative-led—imposing a rate increase of 23 per cent. That will do industry in Bedfordshire no good whatsover in view of the battle that we are waging to get new industry into the county. It is vital that we retain a military contract at Bedford and keep its many hundreds of employees in work.

The latest position on the military contract was mentioned in a letter to me from my right hon. Friend the Secretary of State for Defence on 20 January. He said: I am hopeful of reaching our decisions on the new 4 tonne programme and other military truck orders for Bedford Trucks in the near future. In these circumstances, all I can do is to reassure you that we are giving every consideration to Bedford's proposals and will take account of the factors you have mentioned along with all the other relevant aspects before making final decisions. There are three relevant aspects. The first is employment in the area. The second is the need to continue Bedford's excellent record of supplying first-class military equipment to the Ministry of Defence in peace and in war. I stress that when America was neutral between September 1939 and December 1941, it made no difference to the fact that General Motors, which owns Bedford, kept pouring out trucks for the use of the British Army in the years when we were on our own. The third relevant aspect is the ancillary industries and suppliers which still depend upon the Bedford plant to maintain employment.

I mention another consideration which is extremely relevant and that is the position of Renault Trucks, which manufactures on the other side of the road from Bedford in Dunstable. There is a strong case for seeing whether it is possible for the two plants to co-operate on the military contract.

My hon. Friend the Member for Birmingham, Northfield (Mr. King) mentioned Renault which has 97 per cent. British content in its light trucks and over 60 per cent. British content in its heavy vehicles. It is, therefore, a most welcome European company manufacturing in Dunstable, using British parts and sustaining hundreds of British jobs and, therefore, the welfare of hundreds of British families. I urge the Government to look to Renault to see whether there is some way in which Renault and Bedford could form a partnership for the military contract and, thereby, strengthen our truck manufacturing base in south Bedfordshire and our employment base throughout the county.

I should like to say one or two things about the national situation. I hope that this will be the year in which my right hon. Friend the Chancellor of the Exchequer finally gets rid of the 10 per cent. car tax. With his tax revenues now extremely buoyant and the proportion of United Kingdom market taken by United Kingdom-sourced motor vehicles now better than 50 per cent., it is an ideal time to build on the improvements in the industry by using the tax system to achieve higher volumes of production in the United Kingdom, which would be of great benefit to the suppliers to the industry as well as to the manufacturers.

If one adds to that the current favourable exchange rate, Britain is, as has already been said, the ideal prime area for vehicle manufacturing. Let us use the tax system to encourage that further.

We are, after all, a road based economy and the Government should always be doing things that encourage companies to manufacture cars and trucks here. For years the tax system was used against the motor vehicle industry. Now is the time for the tax system to be used to help the industry.

I add two points to the overwhelming case to get rid of the 10 per cent. car tax. First, I hope that the Chancellor will change the capital allowance schemes, in a way that will encourage buyers of trucks to change them more frequently. I hope that that would mean more orders for our manufacturing base in Britain.

Secondly, I would like the Chancellor to look at the question of petrol tax on engines where the engines are being used merely for research and testing. In other words, he should do something further to the tax system which would encourage the multinationals and others to say, "On testing our engines in Britain, the Chancellor does not apply taxes to the fuel we use solely for the testing." That would be another reason for manufacturing in Britain.

The city technology colleges are now in their infancy but once they get going they should be sited near to areas where we manufacture trucks and cars because, as has already been said, there will be huge changes in technology and training and we want opportunities nearby for young people to learn those new skills by going to a city technology college. I obviously want such a college sited in Bedfordshire and near the plants which my hon. Friends have mentioned.

By doing those positive things, the Government can build on what I think is a changing and improving situation for many thousands of our people who work in the car and truck industries.

10.8 pm

Mr. Den Dover (Chorley)

It gives me great pleasure to have an opportunity to speak about the anxiety and worry of the Leyland workers and the Chorley workers. Some 2,500 or 3,000 people in my constituency work at the Leyland assembly plant, in the engine and foundry production facilities or at Multipart in Chorley.

We have heard tonight from the Secretary of State that we are talking of a "merged truck venture". I believe that we have changed the terminology from "joint venture", which I accept can be other than 50:50 if it is spelt out. We are talking about a predominant number of United Kingdom companies and only one Dutch company, DAF Trucks.

In a letter to Members of Parliament the chairman of Rover Group says: Rover Group will take a 40 per cent. shareholding in the company"— that is, the merged truck venture— reflecting the assets which they are contributing to it. We know from letters that the facilities in the United Kingdom are contributing some £180 million to the joint truck venture. That would mean that £270 million of facilities were donated or given to the joint venture by the Dutch.

I have no proof of that. I originally thought that the letter that was sent to my workers was talking only about a United Kingdom side of the deal. The letter to the Leyland Trucks and Leyland Parts workers says: This will be done by forming a new joint Anglo-Dutch venture, in which the Rover Group will retain a 40 per cent. shareholding, the UK part of which is to be known as Leyland-DAF. The letter does not say that the Rover Group will "obtain" a 40 per cent. share of a joint venture that embraces Europe and elsewhere in the world. I genuinely believed that it would relate only to the United Kingdom.

I should like to emphasise this. What would happen if the engine and foundry facilities at Leyland were to continue? What would happen if the Scammell works were to continue? What would the balance of ownership and joint venture be then? Surely it would be around 50:50. The write-off of some £680 million of which perhaps some £450 million or £500 million relates to Leyland Trucks, is not all wasted money. It is an investment in know-how, technology and facilities; it is not money down the drain. Therefore, one cannot just take the assets that now lie on the ground. The inbuilt know-how, technology and development and the marketing expertise that have been built up are second to none, and have led to United Kingdom market leadership, from Leyland Trucks.

Therefore, I believe that we should really be talking about a joint 50:50 venture. Admittedly, the decision making would have to be spelled out. It is common to both sides of the House that nobody is happy with the 40:60 deal that is proposed. Therefore, can the Minister of State give an assurance that the Rover Group will pursue a 50:50 true joint venture? That will meet the wishes of my constituents in Chorley.

During the lobby last week, I was delighted to hear from them that they do not pull away from the merged truck venture with DAF. They see in it great possibilities for the better assurance of jobs for them in the future. That is perhaps the best way ahead for the Leyland and Chorley workers and for Leyland Trucks and the parts depot at Chorley. We could see expansion and job gains in the next few years, but we in the United Kingdom will not have a fair share and say in the decisions that will be made by managing boards or by company directors.

It is essential that the deal be renegotiated. Although I do not agree with much of the Opposition's amendment, I agree that the Government should be required to renegotiate the transaction on the basis of a genuine joint venture, with each party having a 50 per cent. interest. Then and only then will the best interests of our investment as taxpayers in the Rover Group, in Leyland Trucks and Leyland Parts, be served. I welcome DAF merging, but it has to be on the right basis. If I do not have the assurance that the Government will actively pursue a 50:50 deal, I shall be forced to vote against them.

10.14 pm
Mr. Michael J. Martin (Glasgow, Springburn)

The only truck-making facility that is now left in Scotland is the Albion works at Scotstoun in Glasgow. We lost the Leyland Trucks factory in Ba.thgate, and some years ago we lost the car-making facility at Linwood.

I served an apprenticeship as a metal worker, and I know how important it is to many families in the west of Scotland and in the central belt that sons and, nowadays, daughters have the opportunity to go into engineering. It is all very well for the Secretary of State for Scotland to tell us that he is trying to bring service industries north of the border, but it is nonsense to say that such jobs will last, because north of the border we belong to traditional engineering communities and have skills that have taken generations to learn.

Because of Government policy that is causing the rundown of companies and the activities of multinationals, communities that have served the nation well with their engineering skills are losing out. If we are to retain manufacturing industry in Britain the Government must give every support to engineering companies. That means not only giving grants and subsidies to companies to encourage them, but ensuring that proper and adequate training is given to our young people.

I know that many people of my generation served apprenticeships and worked in engineering. We thought little about employment other than engineering when we left school and either went into the shipyard or into places like the Albion works or the railway workshops in my constituency. We were pleased to get an apprenticeship. Many of our parents had bitter memories of the depression and they encouraged us to go into engineering.

It is sad that many young people leaving school today who have far better qualifications than we had, because they have O and A-levels, and who want to go into engineering cannot do so because there are no openings. The Albion works is the only truck-making capacity left in Scotland and its intake of apprentices has gone lower and lower since this Government came to power. The Government claim that they will bring about an upturn in the economy. That means that we shall need skilled men and women. Where shall we get such people unless we are prepared to train them now and to think ahead to the future?

If enough companies do not exist to provide employment, people should be employed in our excellent colleges of engineering. In my constituency the teachers in the Springburn college of engineering have very low morale because they cannot get apprentices. That should not be the case. All over Britain there are people with teaching expertise and we should use that expertise to get young people involved in training that will turn out engineers, metal workers like me, draughtsmen and metallurgists. The universities should play a part by turning out graduate engineers. If we do not do that we are lost and all the money that previous Governments and this Government have invested will be wasted. More and more we shall find that foreign companies will be in control of our future.

I admit that I do not know a great deal about the DAF takeover and that many hon. Members will know more than I do. It worries me that foreign companies which in some respects are our competitors have control over the future of a very important section of our industry. If we do not watch out we could go down that road. Within a generation we could have no truck-making facilities worth talking about and what little we had would be in the control of foreigners.

I am aware that we shall have another opportunity to discuss Caterpillar, but it is important to stress that the work force at Caterpillar is involved in manufacture of a similar nature to car manufacture. Only a few months ago Ministers and hon. Members were told by the American owners of Caterpillar that the work force was safe and that there was a good future for the company. The company stated that it was investing in the plant. Now men and women in the community are involved in a sit-in because the only industry that they have left is disappearing before their eyes. I would not like that to happen throughout the country.

Although I have highlighted the point that only one area north of the border, Albion, is involved in truck-making, I am aware that the work that takes place in other hon. Members' constituencies has a beneficial effect on companies within my constituency. There are companies within the west of Scotland that, as part of the component industry, are dependent on orders from car manufacturers based in the constituencies of other hon. Members. As such, a healthy car industry will have a beneficial effect on my constituency and other parts of the United Kingdom. Although I would be glad if the manufacturers of cars and trucks came to the west of Scotland, I am aware that the steel industry in Scotland depends on healthy truck-making facilities elsewhere.

When I go to industrial seminars all too often I listen to industrialists talk about new technology as if everything to do with electronics represents the answer for British industry. They discuss floppy discs, computers, new designs and all the rest of it. Although technology is important let us not forget the traditional heavy engineering industries that we are discussing tonight. Such industries are labour intensive and need a high degree of skill. If they prosper they will go a long way to reducing unemployment in our communities. I trust that the Minister will take on board what I have said. We should be as proud and protective of British companies as are the Americans and Europeans.

We should think more about training in our universities and colleges. I come from the west of Scotland and when I was at school those who taught me often had contempt for the industries that were close to the schools in my community. That is still the case. Many bright pupils are encouraged to go into law or commerce and somehow or other engineering is still a dirty word.

Engineers create the wealth of this country. It is engineers that we need for Rolls-Royce and British Leyland. With the greatest respect to accountants and people involved in the law, they do not produce the wealth of the country. We need engineering expertise and such expertise is in demand throughout the country and throughout the world. We must start in the schools to encourage our bright young people to go into engineering and thus get us out of our rut.

10.25 pm
Mr. Michael Fallon (Darlington)

I regret that, for the second time in this Parliament, I cannot support the Government motion, and I want to explain why. I fully endorse the corporate plan. It is clear that Leyland's future must be in the private sector. I have long believed that all industries should be in the private sector and should contribute through profits and taxation to the schools, hospitals and public services that we need, instead of drawing resources away from them. God knows, Leyland has drawn enough resources away from those public services over the past 10 to 15 years. Of course, Leyland Bus and Leyland Trucks have to be sorted out, rationalised and restructured. But how are we to do that?

I oppose this Leyland-DAF deal. It is anti-competitive. The purpose of privatisation is to widen choice and to enhance competition in a particular industry. Leyland Trucks, for all its faults, used a multiplicity of United Kingdom suppliers. Under this Leyland-DAF deal, DAF will be given a virtual monopoly over the supply of engines in the new heavy truck and light truck programmes which are to be developed. In other words, this Leyland-DAF deal will cordon off part of the market which is competitive at the moment and will restrict it solely to one Dutch supplier.

The deal will cut out the independent suppliers in the market place, which I thought the Government's industrial strategy was supposed to encourage. It will have an immediate and damaging effect on the Cummins engine company, a principal supplier to Leyland Trucks. That company supplies heavy and light engines and the components that go with them from factories at Shotts and Darlington. Through this deal, Cummins' market will be restricted.

In November, Cummins in Darlington employed 1,100 people. Proposals were announced to make 600 redundant. After a vigorous campaign, including a debate in the House, those proposals were revised and some 230 jobs were saved. All those jobs are now at risk again because the Government— not the company— have decided to restrict Cummins' market.

I oppose the deal also because it is a producers' deal. The deal may well suit the Rover Group and may well be the best solution for Leyland Trucks, but it has not been struck in the best interests of the other clients of the components suppliers—the customers. It is a deal such as those which so often have been undertaken by successive Govenments in textiles, agriculture and the rest of the motor industry. It is concerned with preserving the primary jobs at Leyland. Of course, my hon. Friend the Member for South Ribble (Mr. Atkins) is right to fight for those jobs, but it ignores the secondary jobs—the jobs downstream which cannot be quantified so easily and which are lost in dribs and drabs over successive years. Because it is a producers' deal, it will inevitably lead to further concentration and integration in the market place instead of more competition and greater diversification. In short, this is a very poor deal.

I do not suggest that the Paccar option would necessarily have been better. I am prepared to accept that for Leyland Trucks, the Paccar option may not have been as attractive, but equally it would be wrong to suggest that the Government only had this DAF deal or that Paccar option to consider as alternatives. After all, the Government, through their shareholding in the Rover Group in Leyland, held all the cards. It was open to my right hon. and hon. Friends in the Department to modify the DAF proposals which were presented to them through the Rover board.

As the right hon. and learned Member for Monklands, East (Mr. Smith) pointed out, we have a good deal for DAF. We are handing over to DAF £175 million in public assets; we are scrubbing a debt of some £680 million; we are handing over 7,000 employees and we are taking only three of 17 places on the board. The Dutch have not done as well since Admiral Tromp sailed up the Thames. This is not a joint venture agreement at all. We have agreed to hand over these public assets; we have agreed to wipe off the debt; we have agreed to take only three of the 17 places on the board. Now we come to the nub of the argument. What has DAF been forced to agree? Has it agreed to delay the development of its heavy truck programme; has it agreed to phase it in slowly over five to ten years? We have no guarantee about that.

My hon. Friend the Minister of State has written to me this evening, but he can give me the assurance only that such a development programme will take some considerable time to complete. I cannot go back and tell my constituents that they may be out of jobs but that it depends on how long DAF takes to get its heavy truck programme going.

On the light engine side, has DAF agreed to defer the introduction of its light engine family that we read about in Truck magazine last month? Again my hon. Friend in his full and courteous letter says: The new DAF 6.2 litre engine family has already been developed and will be available in DAF's present range of medium trucks. This range is not a replacement for Leyland's medium trucks which will continue until such time as a new joint model range is developed. That will of course take some considerable time".

Again, I cannot go back and tell my constituents that whether or not they have jobs in five years' time will depend on our being able, through our three out of 17 directors, to get a reasonable restraint of five, seven or 10 years on the development of those programmes.

Before the heads of agreement were finalised and the deal was signed, why did we not use our 40 per cent. shareholding to insist on 40 per cent. membership of the board, and on specific assurances regarding the heavy engine programme, the light engine programme and the proportion of United Kingdom component sourcing that we expect from this joint venture within a specific number of years? We, who are handing over these assets and wiping off the existing debts, were entitled to ask for such assurances on behalf of the British taxpayers who have put a considerable amount of money into Leyland over the years.

It is with regret that I have to say that, unless my hon. Friend can convince me on any of those points, and although I do not agree with the rest of the Opposition amendment, I must agree with them that the contract should and could still be renegotiated.

10.33 pm
Mr. David Gilroy Bevan (Birmingham, Yardley)

There is a good reason why Birmingham has been referred to as the iron heart of England. It is because of its past and present dependence upon heavy industry and upon the motor car in particular and the manufacture of all its components. Because of the success of the Government's present policies, I support the motion. I thank my right hon. Friend the Secretary of State and my hon. Friend the Minister for taking careful note of what has been said in the midlands and in my constituency. I thank them for coming to the defence of the car industry, Land Rover and Range Rover.

The hon. Member for Preston (Mr. Thorne) referred to the Tory Members who, earlier this year, prevented the Government from selling Austin Rover and Land Rover. I am not only proud but pleased to admit that I was one of those hon. Members. I am pleased also that we prevailed upon the Government to take such action. We did not like the way in which the operations—if they were operations—to sell the companies had taken place. We did not like the secrecy that surrounded the matter. We did not believe that the £2 billion of investors' money that was put into the Austin Rover Group and into the Land Rover section in 1979 was wasted. We thought that it was just about to bear fruit.

The fact that that investment has borne fruit, the fact that exports of Austin Rover cars have gone up by about 16 per cent. in the past year, the fact that the Range Rover is being introduced into the United States, the sales of which, in the first year, are expected to exceed the estimated 4,000 models by perhaps double that number, are signs that we were right. Therefore, it is appropriate that, at the time that we have been proved to be correct, those of us who maintain our defence of Land Rover and Range Rover should now speak for the Government and for the wisdom of the policies that they have followed.

Indeed, I particularly thank the Minister for the courtesy that he showed in discussions and negotiations and the care that he, together with his senior colleagues, evinced in his consideration and almost entire acceptance of the British Leyland corporate plan.

My hon. Friend the Member for Birmingham, Northfield (Mr. King) made a succinct speech that was well-backed by statistics in every respect. My hon. Friend and I went to Dallas and spoke to the distributor of the Sterling motor car, about which I put down an early day motion many months ago, wishing it great success and stating that it would be a world beater. That distributor made it quite clear that it was a British product that would sweep the States and of which he could not get enough. He wanted to ensure that the model would be delivered.

My constituency has been denuded of British Leyland factories, apart from one. There were eight factories in my constituency. Land Rover has moved out. It has now resettled over the border in the old SDI factory in Lode lane. I did not object to that move, because I could see that it was a necessary rationalisation. But we are now about to witness the greater development and success sales of the Land Rover. It has gone in great numbers to Germany, France and the United States of America. I am convinced that we shall see a success story that will be backed up even more fully by the success of the new Land Rover 90, which certainly represents a bargain.

Within the last day or so we have heard of the success of the Maestro panel van, about 4,000 of which have been sold to British Telecom. We see all around us signs of the investment that the Government have made on behalf of the British taxpayer. They have given nearly £700 million to British Leyland. My constituents, the work force and people in the midlands can have every confidence in the Government's actions over the Austin Rover group.

The present chairman of the group has decided to retain the Mini, and we compliment him on that decision. We should also compliment the previous chairman of Austin Rover and his team on their introduction of new designs and on insisting that the success of British Leyland could depend on the success of the Rover 800 range.

We are on the threshold of an exciting future because the Government's policies have paid off. They have listened to those of us who believed that it would be wrong to do other than what they did in the circumstances of a few months ago. Therefore, we must give praise where praise is due.

I am convinced that Austin Rover is about to make most excellent progress. Home produced vehicles account for over 50 per cent. of the home market. To ensure the continued success of Austin Rover in the export market it is imperative that the home market should also be increased. Whenever British people purchase a new car they should strongly consider a British manufactured product—preferably an Austin Rover product. That would ensure the continuance of its success story.

Over 60 per cent. of the people in my part of the country own their own homes. The ownership of shares is also increasing. We should also try to ensure the wider ownership of British produced cars, including second cars for each family. Each of us must do everything possible to back British manufactured cars.

I, too, should like the 10 per cent. special car tax to be removed. The only consumer goods that bear a tax of 24.6 per cent. are cars; all other goods that are sold bear a tax of only 15 per cent. I hope that my right hon. Friend the Chancellor of the Exchequer will rectify that discrepancy and enable the success story to continue.

10.43 pm
Mrs. Ann Winterton (Congleton)

I am glad that I have caught your eye, Mr. Deputy Speaker, before the sands of time run out in this most important and wide-ranging debate on the motor vehicle industry. In the interests of brevity, I shall restrict my few remarks to the Leyland Truck sector of the industry.

When we seek a solution to the problems that face Leyland Trucks we must consider what is the best overall solution in the national interest, not least to relieve the British taxpayer of the burden of the subsidy to Leyland Trucks, amounting to approximately £1.5 million each week, but to retain the maximum number of jobs in this country at Leyland and in companies in the components industry. In other words, although it is inevitable that job losses should occur in the short term whichever solution is adopted—that is a bullet that we must bite—it is vital to maintain the maximum manufacturing capacity in the United Kingdom and not to allow it to die or export it elsewhere, for example to Europe.

My right hon. Friend the Secretary of State must give some clarification at some stage about what is meant by "significant" in relation to the British content in the new range of trucks in the Anglo-Dutch company. We must have clarification if our suspicions are to be allayed that in future even more components will be sourced in Europe or in Holland. Many hon. Members expressed the view that if this is a genuine partnership, equity in the company should he split 50: 50 between Leyland and DAF, and I agree with them. Certainly we should have greater representation on the boards of directors.

The other company to bid for Leyland Trucks was Paccar, which is 100 per cent. American-owned. Why should its offer have been considered by many to be preferable to that of DAF? By "many" I include the majority of Leyland's major customers and the majority of Leyland distributors. Paccar took over Foden, which employed more than 3,000 in 1982; now it employes 450 at its plant in Sandbach. But it has brought Foden back into profitability by introducing improved cab design and comfort and by insisting on a high quality vehicle to he delivered on time to the customer's exact specifications. It has also been successful in winning two Ministry of Defence contracts against extremely stiff competition and the component sourcing of those contracts is 95 per cent. British.

Paccar announced during the negotiations that it would have continued the 90 per cent. British sourcing which is at present in force at Leyland. I suggest that 90 per cent. is, indeed, a "significant" figure and perhaps my hon. Friend the Minister would like to comment on that when he replies.

It should also be known that Paccar would have offered Leyland Trucks a market in the United States of America for the Roadrunner truck and initially said that it could have offered this market for 3,000 trucks, which is exactly one third of the production of British Leyland. Paccar already has 20 per cent. of the United States' heavy truck market.

Incidentally, Paccar buys all its drive-line components—engines, gearboxes and axles—from outside suppliers through British subsidiaries of companies, such as Cummins, Rockwell and Eaton. It would have continued to do so, if it had been successful in acquiring Leyland. It made the offer for Leyland from a position of financial strength, having made more than £164 million profit in the past three years. I hasten to add that it made the offer to buy Leyland outright, in good faith and without the sweetener of Freight Rover thrown in.

Often we talk, wrongly, of Leyland Trucks being the last British truck manufacturer—a statement which makes the blood boil of many hundreds of my constituents in Sandbach who are associated with ERF. ERF was founded in 1933 when there were dozens of commercial vehicle manufacturers in Britain. During the past 20 years there have been many mergers and takeovers—and the total loss of some old names. Throughout that period ERF has remained independent and British. It welcomes the fact that it will not be competing with a British Government subsidised competitor and it is looking forward to the future with a great deal of interest. At present, ERF has its best forward-order book for seven years, and it is building for the future on the success of its new E series and plans to increase production by 50 per cent. in the next three years, which must surely be good news for employment in south-east Cheshire.

ERF will continue its policy of sourcing components in the United Kingdom wherever possible, and the present level is approximately 85 per cent. It employs 1,000 people in the group, but it is significant that its knock-on effect runs to over 10,000 employees. Those people are indirectly affected through its suppliers and sub-contractors throughout the country.

Having fought through the worst recession in living memory, ERF can face the future with confidence and build on its 10 per cent. share of the United Kingdom heavy truck market.

In conclusion, I return to where I began; to whether the solution which is proposed—the DAF-Leyland deal—is in the best national interests in the long-term. On that score, I am not very confident, but I am confident that this deal will bring opportunities to my constituency and that Foden and ERF will be in there fighting to extend their share of this highly competitive market. As both, in their different ways, produce trucks of an extremely high quality, it should be interesting to see how successful they are in the future.

10.52 pm
Mr. Kenneth Hind (Lancashire, West)

I am grateful for the opportunity of catching your eye, Mr. Deputy Speaker, and I shall be brief.

Among my constituents are people who work at the Leyland Trucks factory and in the various operations which are associated with Leyland Bus and Leyland Trucks. My main interest in rising tonight is to seek to maintain the manufacture of heavy goods vehicles in Lancashire for the foreseeable future.

Constituency Members such as myself and my hon. Friend the Member for South Ribble (Mr. Atkins) are concerned to maintain the best possible manufacturing capacity and deal for those who work at these factories. I must, therefore, express some worries as to the Government's proposals. There was no doubt in the minds of the work force—they put this forward in 1982—that Leyland Trucks had to take in a partner. That is common sense and I fully support that. Therefore, the question is to what degree and in what proportion does that partnership take? The Government propose that there he a 60: 40 partnership. I would be failing in my duty if I did not say to my right hon. Friend and my hon. Friend the Minister that the work force are most concerned, quite rightly, that there has not been a 50: 50 merger with DAF. They have good reasons for thinking that and I hope that the Minister, when winding-up tonight, will answer some of their reservations. Leyland Trucks is bringing £150 million worth of assets and 7,000 workers into this merger. It is also bringing at least 16 per cent. of the British heavy goods vehicle market. Left out of that merger is the foundry, which has been established at Leyland for some time, and the engine factory. If those two items were included, it could be argued strongly that that would make it 50: 50 partnership. I am most concerned about the engine factory. The 400 engine, which has been referred to by many of my colleagues, is a substantial engine. It has good markets and has been developed. It has a future and I am told by those who work for British Leyland that many customers have said that should the 400 engine not be available in the vehicles produced at Leyland they will be looking elsewhere for their vehicles in the future.

The TL11 engine has also been developed and is capable of further development. That will result in good markets and will provide a good deal of work in the foundry and the engine factory.

In contrast to that, DAF proposes to produce engines in in Holland and in Germany. But when we scrutinise what it is proposing, 70 per cent. of the engines that are produced for DAF trucks at the moment are produced by other manufacturers, predominantly in Germany, mainly by Fitzwinter. If that production was to be transferred as part of the new company to the engine factory at Leyland it would preserve many more jobs and it would make sense to keep the production of engine components within the company rather than going outside it. It would also preserve more jobs in the north-west in areas where they are greatly needed.

When we are facing the possibility of inviting Leyland Trucks to tender for one of the biggest Ministry of Defence contracts for vehicles that has ever been purchased by this Government, or by any British Government, it makes no sense to have an engine capacity dependent upon factories in Germany. If there was an East-West war, under any scenario Germany and its factories would be in the centre of the battlefield. It makes much more sense to have the capacity based in the United Kingdom, particularly in central Lancashire.

For those reasons, there are many questions to be answered tonight. I would press my hon. Friend the Minister to consider that it does not make a lot of sense to have so much of the engine capacity to be built by Fitzwinter when there is capacity in Lancashire to meet those demands.

On control, I can only press my hon. Friend that for us to have only three directors on two boards with the rest coming from DAF does not make a great deal of sense. It does not even represent 60:40 control and does not give the sort of reassurance for which the work force, whom we are taking from a British company into this new company, are looking. In that respect we have a duty to stand by it and ensure that its interests are properly represented.

A series of questions needs to be answered. Rightly, the work force is entitled to ask for some job protection. What guarantees does it have from the new company, and DAF in particular, of continued production at Leyland and in Lancashire? What guarantees does it have of the use of British components within the existing Leyland range, and, indeed, within the DAF range? I am told that Leyland takes components from 5,520 suppliers, most of whom are British. Those companies will also depend on the new company and their requirements are important for the British economy.

I take the point made by my hon. Friend the Member for Darlington (Mr. Fallon) about Cummins engines. As well as using Leyland engines, the present Leyland Trucks range is heavily reliant on Cummins engines produced in Darlington.

Both the work force and the people of Lancashire think that the idea is imaginative. It is necessary to produce wider markets for the company in the future and to preserve employment in Lancashire. But we must be told this evening why there is not a 50:50 partnership. Why is it 60:40? Will my hon. Friend the Minister seriously consider the representations for a 50:50 partnership?

Mr. Roger Stott (Wigan)

Will the hon. Gentleman give way?

Mr. Hind

I apologise, but others wish to speak.

10.59 pm
Mr. Terry Davis (Birmingham, Hodge Hill)

In his opening contribution to the debate, the Secretary of State made what I would describe as a "revealing speech". If we put on one side his ritual denunciation of the Labour party, we are left with the corporate plan for the Rover Group and a collation of extracts from press releases from various other motor manufacturers. Nevertheless I pay the Secretary of State the compliment of following, if I may, the thread of his speech.

Like my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), I want to emphasise that the Labour party welcomes the announcement that the AR8 vehicle and the K series engine are definitely going ahead, but I should like to make two additional points.

First, there should never have been any doubt about Government support for those projects.

Second, unlike the hon. Member for Oxford, East (Mr. Norris) and the hon. Member for Birmingham, Northfield (Mr. King), most of that hon. Gentleman's constituents in Birmingham and the Labour party are concerned about the future of AR6. No one in Birmingham except the hon. Member for Northfield believes that the AR6 will survive. Most people believe that it is dead and buried whereas it is absolutely essential for the future of Austin Rover that the AR6 should continue if Austin Rover is itself to continue as a volume producer of motor vehicles. The cancellation of the project is bound to raise the question, as my right hon. and learned Friend the Member for Monklands, East explained, whether the policy of the Government and of Mr. Graham Day is for Austin Rover to withdraw from volume car production and become a specialist car producer with Ford or Honda left to pick up volume production. Our fears are reinforced by the reference in the corporate plan to moving up market and into specialist niches. When the Minister replies, I hope that he will explain what that reference is supposed to mean.

The Secretary of State, the hon. Member for Oxford, East and the hon. Member for Northfield made no reference to redundancies at Austin Rover. Indeed, the hon. Member for Northfield told us that wherever we look in the motor industry, there is good news. He seems to think that it is good news for the staff at Longbridge who are losing their jobs— an announcement which was made only two or three weeks before the corporate plan was published. There are to be staff redundancies on the scale of 1: 8 of all staff in Austin Rover. Some 1,265 people are to lose their jobs, and 380 will lose their jobs at Longbridge and Drews lane. However, the hon. Member for Northfield told us that there is good news where ever we look.

Mr. Graham Day and the Government are reducing the staff at Austin Rover to meet a sales level of 450,000 vehicles rather than increasing sales to justify the staff level that the Government and Mr. Day inherited. The Secretary of State took pride today in announcing that in the first two months of this year Austin Rover had a market share of 17 per cent. However, eight years ago its market share was 23 per cent. That is not only a measure of the decline of Austin Rover but shows that the Secretary of State is easily satisfied by temporary success. A market share of 17 per cent. and sales of 450,000 may satisfy the Government and Mr. Graham Day, but that is not good enough for Austin Rover or the Rover Group. The Secretary of State completely ignores and refuses to comment in the House when questioned about the decision to sack 335 engineering and technical people among these staff. They are the people who design the cars and who are responsible for improving the quality of the existing range.

The Secretary of State told us two weeks ago that it is early days and that the redundancies should be voluntary. The truth is that the Rover Group has had only—as of today—470 firm applications for voluntary redundancy. When the Minister replies, I hope that he will tell us what is the attitude of the Secretary of State and the Conservative Government to the possibility of compulsory redundancies being declared for the staff at Austin Rover.

The spread of redundancies has not yet ended. There is to be another announcement—which is widely known in Birmingham and Oxford— that there are to be another 250 compulsory redundancies in the Austin Rover Group. That announcement has not yet been made, and the unions have been told that a decision is still under review. However, everyone knows that security firms are advertising for staff to take on the security work at Austin Rover because this work is going to be subcontracted, with another 250 redundancies for staff at Austin Rover.

The Secretary of State and Mr. Graham Day tell us that there must be redundancies, because Austin Rover sales have declined, but the fact is that Austin Rover sales were so low in 1986 for two reasons: first, the uncertainty created by the Government as a result of the talks with Ford a year ago; secondly, the damage directly caused to Austin Rover by the Government. My hon. Friend the Member for Warrington, North (Mr. Hoyle) told the House how the management of Austin Rover was approached by Ford and asked to provide confidential commercial information. To its credit, the management refused, but then the former Secretary of State, the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), contacted Sir Austin Bide, the chairman of what is now called the Rover Group, as a result of which the board of Rover Group instructed management at Austin Rover to hand over commercial secrets to its main competitor, the Ford Motor Company. That information included the marketing plans and the pricing strategy for the Metro, and it not not surprising that the result was that the Ford Fiesta outsold the Metro last year. It led directly to a loss of market share for Austin Rover. It was an act of industrial sabotage.

The question that the Minister of State should answer tonight is not whether the right hon. and learned Member for Richmond, Yorks contacted Sir Austin Bide, who then instructed the management to take that action, but whether the right hon. and learned Gentleman got authority from the higher level of the Prime Minister.

On the proposals for Leyland Trucks and DAF, again we are told by the Secretary of State that there is overcapacity, but he fails to answer the question why overcapacity in Europe leads to redundancies in the United Kingdom. There are no redundancies in Holland or elsewhere, but always job losses in the United Kingdom. First, we had the job losses at Bedford Commercial Vehicles Ltd., with American owners deciding to create British redundancies. That closure led directly to a sales opportunity for Leyland, but the Government's response is to approve further redundancies at Leyland Trucks. The Secretary of State defends it by saying that there is overcapacity and that Leyland Trucks is losing £1.5 million a week or £75 million a year. But how much of that loss is accounted for by the interest on the debt of Leyland Trucks—a debt which the Government will write off to make a present of Leyland Trucks to DAF? My right hon. and learned Friend the Member for Monklands, East asked the Secretary of State that question earlier, and it was clear that he did not know. It was also clear that the Minister of State did not know. We all saw the consultations that took place and the arithmetic being done by people in the Box. The Government had failed to ask the question and had never considered the possibility. Their only concern was to write off at taxpayers' expense the debt of Leyland Trucks in order to get rid of it to DA F. They did not consider writing off the debt to allow Leyland Trucks to remain British.

Indeed, we have the testimony of the managing director of Leyland Trucks as to why it is being sold. He said publicly: If Leyland had stood alone it was very difficult to see where that investment would come from except from Government and that was clearly not going to be forthcoming. The pressure was put on the Rover Group to conclude a 40:60 deal with DAF.

My hon. Friend the Member for Preston (Mr. Thorne) drew attention to the effects of the closure of the foundry and Leyland engines. What is more, there will be no alternatives for customers. Those customers who take the products from the foundry at present will also be forced to go overseas. The jobs of those who work at Leyland engines will be replaced by Dutch jobs.

There have been several comments tonight about the effect on Cummins and Perkins. If the criticisms made, even by Conservative Members, are untrue, let the Government explain why, within days of the announcement being made in the House of Commons, DAF approached the manufacturers of machine tools asking them to quote for a 50 per cent. expansion of engine manufacturing capacity in Holland directly to replace the engine capacity that is being closed at Leyland Trucks, jobs will be lost at Leyland Trucks, Cummins and Perkins. To be specific, I shall give the Secretary of State a name. Why was COMAU asked to quote for machine tools to increase the capacity of DAF engines by 50 per cent. so soon after that announcement?

Many hon. Gentlemen have also mentioned the effect on customers.

If the treatment of Leyland Trucks by the Government and the Rover Group is appalling, the treatment of the people who work at Scammell in Watford is outrageous. Two months ago that company was told that it had won an order for DROPS vehicles worth £120 million over the next five years. The work force was told that their jobs were secure. Two months later their jobs are going. the factory is being closed. That factory has made a profit in seven of the past 10 years. As my right hon. and learned Friend the Member for Monklands, East said, that factory has lost two and a half days in strikes in 68 years. The reward for loyalty and hard work is the sack.

The Secretary of State and the hon. Member for Northfield told us that the DAF deal is good for Freight Rover because it will give us distribution in Europe. We already have distribution in Europe. That was last year's announcement. We were told that it was a collaborative deal. The Secretary of State announced it in the House and we were assured that we would be getting all the benefits of DAF selling Sherpa vans on the continent of Europe without it taking over the Freight Rover company.

The hon. Member for Northfield also said that DAF will provide the investment that is badly needed for Sherpa vans, both for new models and for expansion of manufacturing facilities. He said that the money could not come from the Rover Group. He did not read the corporate plan properly. If he does read it he will see that it says quite clearly that the development of new models and the expansion of facilities are capable of being financed conventionally either by the Group or a subsequent purchaser. We know the Government's decision; it must be a purchaser.

In fact, the company is profitable and that is why it is being sold. It is a success. It has increased sales, improved productivity, increased production and, as a result, has increased its profits and taken on more people. The Government's reward for that is to sell it to DAF. Today the Secretary of State claimed that the success of Jaguar provided, in his words, "incontrovertible proof" that privatisation works. That is the real reason for the Government wanting to sell Freight Rover. It is an embarrassment to them. It is profitable and successful under public ownership, and the Government do not like public ownership. The irony is that even after they have given Freight Rover to DAF, it will still be publicly owned. There will still be a public stake even after the flotation, but the public stake will belong to the Dutch Government who will continue to have a 25 per cent. share of that company. The Dutch Government are not so foolish as to sell success.

My hon. Friend the Member for Coventry, North-East (Mr. Park) drew attention to the importance of the decisions for component suppliers. Not only will there be job losses at Leyland and Scammell but in component suppliers. How many jobs will be lost at Lucas, Girling, Smiths, Cummins and Perkins? Have the Government even asked that question? The Secretary of State simply told us that what he still persists in calling a "joint venture" with DAF will be "reflected by changes in the component industry". When he was asked directly by one of his supporters to tell us the percentage of British components, he could reply only by saying that it would be significant. He does not know the numbers. Did he even ask? Did it even occur to him to ask?

There does not seem to be much consultation or consideration by the Government, but there is even less, in fact, none at all, with the work force. Whenever in the past the Secretary of State has been pressed to consult the people who work at Leyland Trucks, Freight Rover or other places, the answer has been that that is a matter for the company. We have seen how much that is worth. There was no consultation whatsoever, infinitely less than there would have been in Holland about any such proposals by DAF affecting Dutch workers.

We are now going to have a so-called joint venture with DAF; 40 per cent. Leyland and 60 per cent. DAF, but not 40 per cent. British directors. As several hon. Members from both sides have mentioned, that is not a joint venture, it is a takeover. If we are going to have a genuine joint venture we should at least have 40 per cent. of the directors instead of three out of 17. What we should have is 50 per cent. of the assets and 50 per cent. of the directors.

The hon. Member for Chorley (Mr. Dover) told us that, if we do not receive an assurance that the arrangements with DAF will be renegotiated, he will be forced to vote against the Government tonight. I must tell the hon. Gentleman and the hon. Member for Darlington (Mr. Fallon) that I do not think that the threat will have much effect on the Government. To be blunt, there is no point in voting against the Government on Wednesday when everybody knows that they will vote for the Government on Thursday, Friday and the following Monday.

The hon. Member for South Ribble (Mr. Atkins) told us that the redundancies were "intolerable and frightful". His belief that they are intolerable lasted only to the point when he told us that he would vote for the Government—

Mr. Robert Atkins

That is not true.

Mr. Davis

It is. The words "intolerable and frightful" are the hon. Gentleman's words, but he will vote for the Government.

Redundancies have been emphasised by all my hon. Friends. There were 1,500 at Austin Rover and 2,200 at Leyland and Watford. Of course, there are extra jobs at Jaguar, Lotus and Cowley, and they are all welcome, but the Government and their supporters ignore the fact that extra jobs at Lotus in Norfolk are little use to someone losing a job at Leyland. They ignore the fact that the extra jobs are production jobs whereas the jobs that are being lost at Austin Rover are staff jobs. Are they really suggesting that the redundant manager or clerical worker at Cowley should take a job on the track?

The fact is that many of the people who will lose their jobs will never work again. That is why my hon. Friends and I are angry. I shall tell the House why I am angry. As my hon. Friends know, I used to work in the motor industry. I worked at a factory called Canley in Coventry. I remember when that factory reverberated with the noise of production. If one goes there today, one walks through vast empty halls where the only sounds are the echo of one's own footsteps. At the end of the week the men and women went home with wage packets—not only with wage packets, but with dignity, self-confidence and self-respect. Today those people do not go to work; they go to jobcentres. They do not clock on; they sign on. They do not receive wage packets; they get giro cheques. That is why Opposition Members are angry. As my hon. Friend the Member for Warrington, North said, they are our neighbours and friends. That is why we are angry.

When we look a the scale and enormity of the damage to industry that has been done by the Government, we are entitled to be angry. When we vote tonight, we shall be expressing not only our anger, but our belief that there must be a better way to treat industry and the people who work in it. We reject the Tory philosophy that people are expendable and that they are only costs of production. I call on all hon. Members from all parties, and from whatever part of the United Kingdom they come, to join the Labour party in the Lobby in opposing that Tory philosophy.

11.16 pm
The Minister of State, Department of Trade and Industry (Mr. Giles Shaw)

I do not wish to share the intemperance of the hon. Member for Birmingham, Hodge Hill (Mr. Davis). I shall endeavour to respond to the points that have been raised in the debate. I start by saying to him and his right hon. and hon. Friends that there is absolutely no question about the importance of maintaining and maximising the number of people who can work in the vehicle industry, have pride in what they do and return with substantial wages in their pockets. What we have to face, and what the hon. Gentleman did not face, is whether there are substantial numbers of customers to buy the products made by those people and what steps should be taken to secure that people buy the products of the industry.

The debate was opened by the right hon. and learned Member for Monklands, East (Mr. Smith). I shall deal with one or two of the issues that he raised and return to the significant issues shortly. The debate has been fully informed and extremely effective. The right hon. and learned Gentleman asked some specific questions to which I hope to provide answers.

The right hon. and learned Gentleman referred to the interest debt in the Rover Group associated with the truck division's losses—about £34 million or £35 million in 1985–86, the last year for which we have full data. The consequence of the debt write-off will be a significant reduction in the interest charges carried by the Rover Group.

The relationship with Honda, mentioned by the right hon. and learned Gentleman, was also reflected in one or two comments by my hon. Friends. That has been and will continue to be a relationship that is gradually moving in phase. The right hon. and learned Gentleman will be aware that the first arrangement was that of a licence to build the Acclaim car. The second was a joint development of the Rover 200 series. Thirdly, with the Rover 800 series, there was not only joint development but joint manufacture, part in the United Kingdom and part in Japan. There has been a steady progression in that relationship. My right hon. Friend the Secretary of State referred positively to the fact that Honda believes that the relationship with Austin Rover will be ongoing and continue to be of great significance to both parties.

The right hon. and learned Gentleman and other hon. Members asked about the AR6. It is part of the policy of the chairman of the Rover Group to maximise the opportunity for the sale of small and volume cars. In the corporate plan, from which hon. Members have quoted, there is a firm commitment to that. My hon. Friends spoke about the huge importance of the sales of the Mini and the Metro. Some 30,000 or more Minis and 150,000 or more Metros have been sold in the last full year. We are talking about a large proportion of Austin Rover's sales. The commitment to that underpins the view of the corporate plan.

The corporate plan is on-going. Although it is set for a five-year period, it contains a lot of the seeds of further development. The right hon. and learned Member for Monklands, East asked where production and investment would come from. If he looks in the Austin Rover section of the plan he will see that it does not set out a complete product plan for the five years. The plan will be subject to review as it proceeds from one year to another. As Graham Day said, that is why the AR6 development has not been cancelled. It is still subject to review according to performance in the market place. The crucial matter about the first year of the plan is to see that the group has that development in the market to which we all aspire. All hon. Members will seek to encourage that.

I shall now turn to the cardinal issues in the debate. As I followed it, there was joint agreement that Austin Rover should develop along the lines that have been laid down in the corporate plan. There are important commitments to the investment in the K-series engine and that is widely welcomed. As my hon. Friend the Member for Oxford, East (Mr. Norris) said, there are important considerations in the case of Cowley which could well produce important developments.

There is a real possibility of Austin Rover being able to stabilise during the current year and being able to look forward to the future with greater confidence as a volume car producer and, indeed, as a volume car exporter. The export figures for recent years eloquently demonstrate that.

The Austin Rover part of the debate produced few real anxieties, except for the question of jobs which was raised by the hon. Member for Hodge Hill. He said that further redundancies were to be announced. I can tell him that the letter issued on 19 February by Mr. Wharton, the managing director of Austin Rover, says: Approval also enables me to say that we are not planning at present any plant closure or further redundancies—other than those staff reductions already announced. In the other part of the debate about Leyland Trucks and the DAF proposal there was considerable discussion. I shall deal with the main issue—the question of he merger and the request by my hon. Friends and the hon. Member for Hodge Hill that there should not be a proposal for a 60: 40 arrangement, but that 50: 50 should be the preferred option. I have been under pressure from my hon. Friends to see that this is renegotiated.

I shall explain to the House why the Government feel with cast iron certainty that this is the correct route to follow. The shareholdings are based on the value of the assets which have been brought in by each partner. That is a reasonable view to take. The merged company will have net assets of over £500 million. As the House was told on 26 February, it is envisaged that Rover Group will transfer to the Leyland-DAF joint venture net assets valued at £179 million—considerably less than 50 per cent. As a result of the merger, Leyland will be part of a much bigger operation than before.

In 1986 DAF produced 15,000 trucks compared with Leyland's production of about 10,000. In 1985, the DAF sales revenue was about £650 million compared with sales revenue by Leyland Trucks of about £400 million. The combined revenue of the group is about £1 billion cash.

In 1985, before interest and tax, DAF made profits of over £20 million and Leyland Trucks lost more than £20 million. In arriving at the proposed distribution, the size of the asset base has been taken into account as well as the fact that the DAF portion, brought into the merged company, is more profitable, larger and more effective in the competitive market.

What will be the benefits to Leyland and why are they important? It will mean significant and continued sourcing of components in the United Kingdom. Light trucks will continue to have the majority of their components—suspension units, axles, engines and cabs— sourced in the United Kingdom. The sourcing will be mixed for medium trucks, but DAF intends to increase purchasing in the United Kingdom. It has said that its primary desire is to sell trucks and not to maximise its production of components.

Leyland Will be competing as part of one of the largest companies in the European market and will have a broader base in which to compete. It will have the prospect of real growth and the prospect of being part of a profitable enterprise. It is important to point out that, as a result of the arrangements, Rover Group, with its shareholding of 40 per cent., will be able to retain the profits of the total operation including the total operation of the DAF company as presently constituted. On the assumption that Leyland vehicles and Leyland components can be developed Rover Group will be part of a profitable enterprise. Is that likely to happen?

The joint venture is already determined to spend £150 million on the development of the Leyland part of the operation. It is determined to see the development of the broadest range of trucks that can compete in Europe—from the lightest vans to the heaviest trucks.

I appreciate the concern expressed by my hon. Friend the Member for Darlington (Mr. Fallon) that Cummins may not view the proposal with the greatest pleasure. I found my hon. Friend's logic extraordinary when he accused the Government of making an uncompetitive move and sought to suggest that we should have negotiated a tied deal with component suppliers that would not be open to any competition. He appeared to be suggesting that value for money, quality and regularity of delivery should have no part to play. That is not sensible. It is more sensible to judge whether the combination of the two companies and their European prospects will lead to more of less units being sold.

DAF has already been selling Rover products in Europe—the Sherpa vans—and it is clear that we shall see increased sales. Those Opposition Members who feel that this is a sellout should take note of the fact that, with regard to the light truck sector, instead of the present order of 1,400 units DAF proposes to take 3,400 units within the next 12 months.

The prospects for the venture, formed in the 60: 40 relationship, are substantial in relation to Leyland Trucks and the employees. The design and technology unit will remain and there will be sourcing from Albion.

On the question of Scammell at Watford, I assure my hon. Friend the Member for Watford, (Mr. Garel-Jones)—who has been most assiduous in his attention to the issue although unable to take part in the debate—and other hon. Members that the Rover Group has assured us that the Ministry of Defence has been consulted and is satisfied. Moreover, the facilities at Leyland can produce the high and heavy range of special military equipment that Scammell has produced. Therefore, there will be continuity and development of the military range, which is of such importance.

In relation to the merger I turn to the question of board representation. I understand that hon. Members believe that the proposed distribution—one on the management board and two on the supervisory board—is inadquate. All boards of directors must carry out their duties in the name of the company as a whole and for the benefit of the shareholders. It is certainly not the case, nor should it be the case, that the board of directors should be composed on a nationalistic basis. We seek the best technical development of the talents available.

In view of what my hon. Friend the Member for South Ribble (Mr. Atkins), who made probably the most effective speech in the debate, has asked us to do, we shall, in discussions with the DAF chairman, ascertain whether there is a possibility of changing the number of directors. I understand that those who work in the company might feel—

It being half-past eleven o'clock, MR. DEPUTY SPEAKER, pursuant to order [10 March], to put forthwith the Questions necessary to dispose of proceedings.

Questions put, That the amendment be made:—

The House divided: Ayes 177, Noes 230.

Division No. 115] [11.30 pm
Abse, Leo Duffy, A. E. P.
Adams, Allen (Paisley N) Dunwoody, Hon Mrs G.
Alton, David Eastham, Ken
Anderson, Donald Evans, John (St. Helens N)
Archer, Rt Hon Peter Fallon, Michael
Ashton, Joe Faulds, Andrew
Atkinson, N. (Tottenham) Fisher, Mark
Bagier, Gordon A. T. Foot, Rt Hon Michael
Banks, Tony (Newham NW) Forrester, John
Barron, Kevin Foster, Derek
Beckett, Mrs Margaret Foulkes, George
Bell, Stuart Fraser, J. (Norwood)
Benn, Rt Hon Tony Freeson, Rt Hon Reginald
Bennett, A. (Dent'n & Red'sh) Freud, Clement
Bermingham, Gerald Garrett, W. E.
Boothroyd, Miss Betty Gilbert, Rt Hon Dr John
Boyes, Roland Godman, Dr Norman
Bray, Dr Jeremy Golding, Mrs Llin
Brown, Hugh D. (Provan) Gould, Bryan
Brown, N. (N'c'tle-u-Tyne E) Hamilton, James (M'well N)
Brown, Ron (E'burgh, Leith) Harrison, Rt Hon Walter
Bruce, Malcolm Hart, Rt Hon Dame Judith
Buchan, Norman Hattersley, Rt Hon Roy
Caborn, Richard Haynes, Frank
Callaghan, Jim (Heyw'd & M) Healey, Rt Hon Denis
Campbell, Ian Heffer, Eric S.
Campbell-Savours, Dale Hogg, N. (C'nauld & Kilsyth)
Canavan, Dennis Holland, Stuart (Vauxhall)
Carlile, Alexander (Montg'y) Home Robertson, John
Clark, Dr David (S Shields) Howell, Rt Hon D. (S'heath)
Clarke, Thomas Hoyle, Douglas
Clay, Robert Hughes, Robert (Aberdeen N)
Clelland, David Gordon Hughes, Simon (Southwark)
Clwyd, Mrs Ann Janner, Hon Greville
Cocks, Rt Hon M. (Bristol S) John, Brynmor
Cohen, Harry Kaufman, Rt Hon Gerald
Coleman, Donald Kennedy, Charles
Conlan, Bernard Kirkwood, Archy
Cook, Frank (Stockton North) Lamond, James
Cook, Robin F. (Livingston) Leighton, Ronald
Corbett, Robin Litherland, Robert
Corbyn, Jeremy Lloyd, Tony (Stretford)
Cox, Thomas (Tooting) Lofthouse, Geoffrey
Craigen, J. M. Loyden, Edward
Crowther, Stan McCartney, Hugh
Cunliffe, Lawrence McDonald, Dr Oonagh
Cunningham, Dr John McGuire, Michael
Dalyell, Tam MacKenzie, Rt Hon Gregor
Davies, Rt Hon Denzil (L'lli) Maclennan, Robert
Davies, Ronald (Caerphilly) McNamara, Kevin
Davis, Terry (B'ham, H'ge H'l) McTaggart, Robert
Deakins, Eric McWilliam, John
Dewar, Donald Madden, Max
Dixon, Donald Martin, Michael
Dobson, Frank Mason, Rt Hon Roy
Dormand, Jack Maxton, John
Douglas, Dick Maynard, Miss Joan
Dover, Den Meacher, Michael
Dubs, Alfred Meadowcroft, Michael
Michie, William Shore, Rt Hon Peter
Mikardo, Ian Short, Ms Clare (Ladywood)
Millan, Rt Hon Bruce Silkin, Rt Hon J.
Miller, Dr M. S. (E Kilbride) Skinner, Dennis
Mitchell, Austin (G't Grimsby) Smith, C.(lsl'ton S & F'bury)
Morris, Rt Hon A. (W'shawe) Smith, Cyril (Rochdale)
Morris, Rt Hon J. (Aberavon) Smith, Rt Hon J. (M'ds E)
Nellist, David Snape, Peter
Oakes, Rt Hon Gordon Soley, Clive
O'Brien, William Spearing, Nigel
O'Neill, Martin Steel, Rt Hon David
Orme, Rt Hon Stanley Stott, Roger
Park, George Straw, Jack
Parry, Robert Thomas, Dr R. (Carmarthen)
Pendry, Tom Thorne, Stan (Preston)
Pike, Peter Tinn, James
Powell, Raymond (Ogmore) Torney, Tom
Prescott, John Wallace, James
Randall, Stuart Wareing, Robert
Raynsford, Nick Weetch, Ken
Redmond, Martin Welsh, Michael
Rees, Rt Hon M. (Leeds S) White, James
Richardson, Ms Jo Williams, Rt Hon A.
Roberts, Ernest (Hackney N) Winnick, David
Robertson, George Woodall, Alec
Robinson, G. (Coventry NW) Wrigglesworth, Ian
Rooker, J. W. Young, David (Bolton SE)
Ross, Ernest (Dundee W)
Rowlands, Ted Tellers for the Ayes:
Sedgemore, Brian Mr. Allen McKay and
Sheerman, Barry Mr. Sean Hughes.
Sheldon, Rt Hon R.
Alexander, Richard Clark, Sir W. (Croydon S)
Ancram, Michael Clarke, Rt Hon K. (Rushcliffe)
Ashby, David Cockeram, Eric
Atkins, Robert (South Ribble) Colvin, Michael
Atkinson, David (B'm'th E) Conway, Derek
Baker, Rt Hon K. (Mole Vall'y) Coombs, Simon
Baker, Nicholas (Dorset N) Cope, John
Baldry, Tony Couchman, James
Banks, Robert (Harrogate) Cranborne, Viscount
Batiste, Spencer Crouch, David
Bellingham, Henry Dickens, Geoffrey
Bendall, Vivian Dorrell, Stephen
Benyon, William Douglas-Hamilton, Lord J.
Best, Keith Dunn, Robert
Bevan, David Gilroy Dykes, Hugh
Biffen, Rt Hon John Edwards, Rt Hon N. (P'broke)
Biggs-Davison, Sir John Eggar, Tim
Blackburn, John Evennett, David
Blaker, Rt Hon Sir Peter Eyre, Sir Reginald
Body, Sir Richard Fairbairn, Nicholas
Bonsor, Sir Nicholas Fletcher, Sir Alexander
Boscawen, Hon Robert Forman, Nigel
Bottomley, Peter Forsyth, Michael (Stirling)
Bowden, A. (Brighton K'to'n) Forth, Eric
Boyson, Dr Rhodes Franks, Cecil
Brinton, Tim Gale, Roger
Brittan, Rt Hon Leon Garel-Jones, Tristan
Brooke, Hon Peter Gilmour, Rt Hon Sir Ian
Brown, M. (Brigg & Cl'thpes) Grist, Ian
Browne, John Hamilton, Neil (Tatton)
Bruinvels, Peter Hargreaves, Kenneth
Bryan, Sir Paul Hawksley, Warren
Bulmer, Esmond Hind. Kenneth
Burt, Alistair Hirst, Michael
Butcher, John Howard, Michael
Butler, Rt Hon Sir Adam Howarth, Alan (Stratf'd-on-A)
Butterfill, John Howarth, Gerald (Cannock)
Carlisle, John (Luton N) Jackson, Robert
Carlisle, Kenneth (Lincoln) Jenkin, Rt Hon Patrick
Carlisle, Rt Hon M. (W'ton S) Key, Robert
Cash, William King, Roger (B'ham N'field)
Channon, Rt Hon Paul Knowles, Michael
Chapman, Sydney Knox, David
Chope, Christopher Lamont, Rt Hon Norman
Churchill, W S. Lang, Ian
Clark, Dr Michael (Rochford) Latham, Michael
Lawler, Geoffrey Rumbold, Mrs Angela
Lawrence, Ivan Ryder, Richard
Lee, John (Pendle) Sackville, Hon Thomas
Leigh, Edward (Gainsbor'gh) Sainsbury, Hon Timothy
Lennox-Boyd, Hon Mark Sayeed, Jonathan
Lilley, Peter Scott, Nicholas
Lloyd, Sir Ian (Havant) Shaw, Giles (Pudsey)
Lloyd, Peter (Fareham) Shaw, Sir Michael (Scarb')
Lord, Michael Shelton, William (Streatham)
Luce, Rt Hon Richard Shepherd, Richard (Aldridge)
Lyell, Nicholas Shersby, Michael
McCurley, Mrs Anna Silvester, Fred
Macfarlane, Neil Sims, Roger
MacGregor, Rt Hon John Skeet, Sir Trevor
Maclean, David John Smith, Sir Dudley (Warwick)
McLoughlin, Patrick Smith, Tim (Beaconsfield)
McNair-Wilson, M. (N'bury) Soames, Hon Nicholas
McQuarrie, Albert Speed, Keith
Madel, David Spencer, Derek
Malins, Humfrey Spicer, Jim (Dorset W)
Maples, John Spicer, Michael (S Worcs)
Marlow, Antony Squire, Robin
Marshall, Michael (Arundel) Stanbrook, Ivor
Mates, Michael Stanley, Rt Hon John
Mather, Sir Carol Steen, Anthony
Maude, Hon Francis Stern, Michael
Maxwell-Hyslop, Robin Stevens, Lewis (Nuneaton)
Mayhew, Sir Patrick Stewart, Allan (Eastwood)
Merchant, Piers Stewart, Andrew (Sherwood)
Meyer, Sir Anthony Stewart, Ian (Hertf'dshire N)
Mills, Iain (Meriden) Stradling Thomas, Sir John
Miscampbell, Norman Sumberg, David
Mitchell, David (Hants NW) Tapsell, Sir Peter
Moate, Roger Taylor, John (Solihull)
Monro, Sir Hector Temple-Morris, Peter
Montgomery, Sir Fergus Terlezki, Stefan
Morris, M. (N'hampton S) Thomas, Rt Hon Peter
Morrison, Hon P. (Chester) Thompson, Donald (Calder V)
Moynihan, Hon C. Thompson, Patrick (N'ich N)
Murphy, Christopher Thorne, Neil (llford S)
Needham, Richard Thornton, Malcolm
Nelson, Anthony Thurnham, Peter
Neubert, Michael Townend, John (Bridlington)
Newton, Tony Trippier, David
Nicholls, Patrick Twinn, Dr Ian
Norris, Steven van Straubenzee, Sir W.
Osborn, Sir John Vaughan, Sir Gerard
Ottaway, Richard Waddington, Rt Hon David
Page, Sir John (Harrow W) Wakeham, Rt Hon John
Page, Richard (Herts SW) Waldegrave, Hon William
Parkinson, Rt Hon Cecil Wall, Sir Patrick
Patten, J. (Oxf W & Abgdn) Waller, Gary
Pawsey, James Ward, John
Peacock, Mrs Elizabeth Wardle, C. (Bexhill)
Porter, Barry Warren, Kenneth
Portillo, Michael Watson, John
Powell, William (Corby) Watts, John
Price, Sir David Wells, Bowen (Hertford)
Proctor, K. Harvey Wells, Sir John (Maidstone)
Raffan, Keith Wheeler, John
Raison, Rt Hon Timothy Whitney, Raymond
Rathbone, Tim Wiggin, Jerry
Rees, Rt Hon Peter (Dover) Wilkinson, John
Renton, Tim Wolfson, Mark
Rhodes James, Robert Wood, Timothy
Rhys Williams, Sir Brandon Young, Sir George (Acton)
Ridley, Rt Hon Nicholas Younger, Rt Hon George
Ridsdale, Sir Julian
Roe, Mrs Marion Tellers for the Noes:
Rossi, Sir Hugh Mr. Gerald Malone and
Rowe, Andrew Mr. David Lightbown.

Question accordingly negatived.

Main Question put and agreed to.

Resolved, That this House welcomes the Government's approval of the Rover Group Corporate Plan; recognises the valuable contribution made by the vehicle industry, both United Kingdom and foreign-owned, to the United Kingdom economy; notes the important role of the United Kingdom component suppliers; welcomes the encouraging outlook for the future of the industry as a whole; and endorses the Government's policies to create the conditions for the long term success of the industry.