HC Deb 02 November 1989 vol 159 cc461-2
13. Mr. Wall

To ask the Secretary of State for Northern Ireland if he will give an account of the circumstances surrounding the disposal of the former Lear Fan factory.

Mr. Needham

The Lear Fan factory was sold by the Industrial Development Board to F. G. Wilson Ltd. in 1988 to meet that company's expansion plans. Wilson, after deciding to expand elsewhere, sold the factory to SRC Composites Ltd. in spring 1989 for the manufacture of composite components. After the IDB refused financial assistance for this project, SRC sold the factory to Bombardier-Short's.

Mr. Wall

Is the Minister not concerned that, in essence, the factory and its equipment were resold for three times the value placed on them by the Government and the receiver? Will he ensure that when factories and equipment are sold in future, there is a clawback clause so that the IDB can share in the profits that are made? Will I be allowed to make the same sort of profit when I sell the dispatch box back to the Minister?

Mr. Needham

The original valuation carried out by the valuation and land office in Northern Ireland, which has great experience of industrial properties in Northern Ireland, valued the factory at £650,000, for which sum it was then sold to Wilson. As the hon. Gentleman knows, Wilson sold it, together with the autoclaves, jigs and tools that were later destroyed, for £3 million to SRC, which was one of the reasons why the Government had doubts about SRC. The factory was then sold by SRC for £1.1 million, which included additional amounts spent on it by SRC in the interim. In my judgment, that was a fair valuation. Of course, if it had been possible to see into the future and to realise that Bombardier-Short's would have the use of the factory and what was in it once it had merged, that would have been a good answer. However, we did not know it at the time. The sale was carried out according to a proper valuation on advice by the VLO and the receiver. I am perfectly happy about the way in which the contracts were decided.

Mr. McNamara

For what reason did the IDB refuse to give grant support?

Mr. Needham

The reason that we did not give grant support, as I wrote to the hon. Gentleman, was that having looked into the background of the company, we found, on advice from the Foreign and Commonwealth Office, that it was an Iraqi-backed company that may well have had connections with the making of ballistic missiles. Under those circumstances, there was no question of the IDB giving support. I should have thought that the hon. Gentleman would congratulate the Government and the IDB on their precipience in finding that out.