HC Deb 30 November 1989 vol 162 cc857-67 4.24 pm
The Secretary of State for Trade and Industry (Mr. Nicholas Ridley)

The report of the Comptroller and Auditor General into the sale of Rover Group to British Aerospace is to be the subject of a hearing by the Public Accounts Committee on 4 December. It would not therefore be normal practice for a statement on the subject to be made in the House in advance of that hearing. However, in the light of today's regrettable disclosure of a confidential memorandum submitted to the Committee, I feel under no such constraint.

The report focuses on three broad aspects of the sale. The first is the exclusivity of negotiation granted to BAe. I need not remind the House of the public controversy and uncertainty created by the 1986 discussions with the Ford Motor Company about its interest in acquiring Austin Rover. It had a serious, detrimental effect on the business, and the Rover board and the Government were determined that the handling of any future privatisation talks should take full account of that experience. Both were convinced that a public auction for the company would be commercially very damaging, and for that reason, following the approach by BAe, it was decided to grant exclusivity for a limited period to see whether a satisfactory agreement could be reached.

Secondly, the report questions the adequacy of the £150 million consideration eventually agreed. I should remind hon. Members of the historical background of Rover Group prior to privatisation. It had already cost the taxpayer £2.9 billion of public funds; that money had been swallowed up in repeated losses while in public ownership. Moreover, the company was dependent on the assurances given by successive Governments in respect of its obligations to banks and trade creditors. That contingent liability on the taxpayer stood at £1.6 billion in March 1988 and was projected to rise over the corporate plan period, because the group's heavy capital expenditure programme outstripped cash generated by forecast trading profits.

Thirdly, the report examines the way in which the negotiations with BAe should have been conducted. Conventional techniques of valuation were clearly inappropriate; it was necessary to approach this as the sale of a going concern, and to strike a reasonable balance between the risks and opportunities confronting BAe as the potential new owners. In that context, I believe that the terms that were eventually agreed represented the best that could be achieved.

Having dealt with the main issues in the NAO's published report, I shall now turn to the confidential memorandum. It is necessary here to recall the fundamental terms of the deal, and the process of their approval. For the business to be privatised successfully, the inheritance of its dismal trading record under public ownership had to be eliminated. In accordance with the state-aid procedures of the European Community, that necessitated exhaustive negotiations with the Commission of an appropriate package.

In July 1988, the Commission agreed a cash injection comprising £469 million in recognition of RG's historic debt, and £78 million in support of its future investment programme in the assisted areas. The Commission was prepared to sanction that aid because Rover Group would henceforth be exposed to the full financial discipline of the market, and because its plans envisaged the elimination of surplus capacity.

When my noble Friend Lord Young disclosed those terms to British Aerospace, the company made it clear that a deal could not be struck on that basis. Four further items were therefore agreed with BAe. First, as BAe wanted to acquire 100 per cent. of the company, the Government agreed a grant of up to £9.5 million towards BAe's costs in buying out the small private shareholding. BAe subsequently bought out those shareholders on terms agreed by itself, Rover Group and their respective advisers to be fair and reasonable.

The second item was a payment of £1.5 million for Rover's privatisation costs. As it was, in effect, Her Majesty's Government who were causing RG to incur those costs, it was only right that Her Majesty's Government should pay them. The third was the waiver of an earlier £5 million contribution that BAe had volunteered towards the Columbus polar platform programme. In the event, that programme is now undergoing thorough revision, so the whole issue of an industrial contribution is being re-examined.

Finally, the Government agreed with BAe that the precise timing of the payment of the £150 million consideration would follow the clarification of certain tax matters. This delay was time-limited to 31 March 1990.

Those items were addressed where relevant in estimates and reports to Parliament. The Government fully recognised that these additional arrangements were material to the Public Accounts Committee investigation, and from the outset full details were volunteered to the National Audit Office.

The Government took the view that these concessions were essentially separate matters consistent with the terms of the Commission's approval. If the EC Commission now wishes to examine them, the Government will be happy to co-operate.

I believe that these arrangements were the least that were necessary to secure the successful transfer of the Rover Group to the private sector, which was essential for the future welfare of the Rover Group and those who work in it, as well as being the best deal available for the taxpayer.

Mr. Gordon Brown (Dunfermline, East)

Why were we not told until now about the additional subsidies of £38 million that were given to British Aerospace? Why did the Secretary of State have to be dragged to the House to make those admissions? How does he justify concealing the subsidies on the ground of commercial confidence when the commercial arrangement was not between British Aerospace and a private company but between British Aerospace and the British taxpayer? As it was £38 million of our money, did we not have a right to know?

As for the additional concealed subsidies, will the Secretary of State now confirm that they include offering to buy up to £9 million worth of shares in Rover only to give them back to British Aerospace for nothing; £5 million for British Aerospace's subscription to the European Space Agency which has nothing to do with the Rover Group; potentially £250 million as a reduction in the compensation payable if Rover were sold on in five years and even deferring the final date for payment for up to 18 months, knowing that a deferred price is a lower price?

Is not the real reason why the Government asked for details of the sale to be kept confidential not a commercial one, because the Minister has not made a commercial case, but the party political embarrassment that would be caused by the revelation of those subsidies?

In those circumstances, given the additional level of subsidy—£38 million—how could his Department have thought that there was no necessity even to inform the European Commission that those subsidies were paid? How can the Prime Minister tell other countries in good faith that they should abolish hidden subsidies before she joins the exchange rate mechanism when she has allowed exactly those hidden subsidies?

Now that the Comptroller has named four other companies that were interested in the Rover Group, and, according to the lunchtime news, one has said that it put its interest in writing, how can the Secretary of State defend the statement of the former Minister, Lord Young, that British Aerospace was the only company to approach me to buy Rover". especially when we now know that Ministers were advised by their own advisers, Baring Brothers, that they should create a competitive market?

As we now know that most of Rover's debts were written off by the Government, that assets in shares in other companies were known by the Government to be worth more than £100 million, that surplus sites that were thrown in are are now worth more than £33 million and that Rover's forecasts were not for losses but for profits totalling £400 million over the next five years—money that could have gone to the taxpayer—how can the Secretary of State now justify selling Rover for only £150 million?

I want a direct answer to this question: is it right that, so far, little or nothing has yet been paid by British Aerospace despite the fact that British Aerospace has made substantial profits from Rover and has already sold assets worth £126 million? Is the issue not the past investment to make Rover profitable, but what the taxpayer and the public could have gained in future as a result of that public investment?

Finally, in those circumstances, how can the Minister possibly deny the serious charges of mismanagement, incompetence and a serious waste of national resources by the Government? Is it not the case that they were interested in privatising Rover at any price and at any cost rather than securing what is in the national interest? Is it not time for open government in this matter and is it not the case that our only hope for open government is a Labour Government?

Mr. Ridley

The items that I mentioned in my statement today were addressed, wherever relevant, in the estimates and reports to Parliament. Full details were made available to the Comptroller and Auditor General when he started his inquiries, as was completely correct. The House is not being told now; the Public Accounts Committee was told before. Nor have I been dragged to the House. I volunteered to make the statement for the convenience of the House. I have made an open statement, so I reject any suggestion that I have sought to conceal anything.

British Aerospace wished to acquire 100 per cent. of the company. We were not in a position to sell it 100 per cent. of the company because there were minority shareholders. It was prefectly right and proper that we should have enabled it to buy out those minority shareholders, because it was much more simple procedurally for it to do so than for the Government to do so directly.

The £5 million for the space project was nothing to do with the motor industry and therefore, in our opinion, nothing to do with the deal reached with the Commission.

The hon. Member for Dunfermline, East (Mr. Brown) seems to be unaware that the reduction in the writing-off of debt, which the Commission insisted be made during negotiations with it, reflected itself in a reduction of what the company would have had to pay back in the event of a sale within five years of the assets and trademarks of the Rover Group. It was right that that figure should have been reduced commensurate with the reduction in the injection of cash made by the Government.

As I have told the House, we had reached agreement with the Commission when these additional items became necessary. The late payment was mentioned in the statement by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), the then Chancellor of the Duchy of Lancaster, on 14 July last year. We took the view that the other items to which I have referred were consistent with the Commission's terms, and that as they did not affect the competitiveness of the Rover Group's production disclosure was not necessary. Any question of reopening the procedure would have jeopardised the deal.

As to the last point made by the hon. Member for Dunfermline, East, far from being a rip-off, let me quote what the hon. Member for Dagenham (Mr. Gould) said when the deal was announced by my right hon. and learned Friend. He said: How is it that British Aerospace has now accepted £250 million less than Ministers initially offered? The hon. Gentleman continued: Is it true that institutional shareholders have already been telephoning to express their objections?"—[Official Report, 14 July 1988; Vol. 137, c. 613.] The allegation then was that we had screwed British Aerospace too hard. Now the hon. Member for Dunfermline, East is saying that the deal was far too soft. The only conclusion that we can draw from that is that it is easy to be wise after the event and that the hon. Gentleman is suffering from an overdose of hindsight.

I should add that no payment has been received. British Aerospace has until the end of March next year.

Mr. Michael Grylls (Surrey, North-West)

Will my right hon. Friend accept that it is obvious from the rather synthetic annoyance of the Opposition that they cannot bear the fact that, because of the Government's successful policies, Rover is now a successful company in the private sector? When they were in office, all they did was pour more and more taxpayers' money into it, and it lost more and more year after year. We have been successful with it.

Is it not true that the financial terms agreed between Rover and British Aerospace were hugely advantageous for the taxpayer, who has been relieved of an enormous contingent liability of £1.8 billion? That must be to the advantage of the taxpayer.

Mr. Ridley

I agree entirely with my hon. Friend. The deal was of great advantage to the taxpayer in staunching the losses that the Rover Group had incurred. The deal was struck in July 1988, but the only deal that could have been done was one agreed by the buyer and seller. In this case, the buyer had grave doubts about whether it wished to proceed, and it almost aborted the sale at the last minute. It did not show any signs whatever that it was not taking great risks in taking on the Rover Group.

Mr. Peter Snape (West Bromwich, East)

Is there no limit to the Secretary of State's arrogance on these matters? Is he aware that the only reason why he is at the Dispatch Box is to pre-empt the inevitable row that would follow this morning's publication of the memorandum in The Guardian? His whole approach typifies the Government's unethical approach to the disposal of public assets. A more fitting place for his talents would be in a used car lot where, as the usual sweetener, he would throw in the whole car factory.

Mr. Ridley

The hon. Gentleman's style is not appropriate on this occasion. It was correct for the Public Accounts Committee to consider the memorandum confidentially. If the memorandum had not been leaked, the Committee could have considered the matter and concluded whether publication was in the national interest. That would have been far the better way to handle the matter. I regret that the PAC has been pre-empted because that has made the matter more difficult to handle. However, as soon as it happened I took the correct action of coming to the House to make a statement.

Mr. Kenneth Warren (Hastings and Rye)

Does my right hon. Friend accept that the openness of his declaration is welcome? Will he further accept that as Chairman of the Select Committee on Trade and Industry, which last year conducted extensive inquiries into the purchase of Rover by British Aerospace, I would have found it helpful if the memorandum had been submitted to the Committee in confidence. With regret, I find unacceptable his statement that the conventional valuations were not appropriate. When my right hon. and noble Friend was asked by the Select Committee whether he had put a valuation on the machinery and assets of Rover, it was to our surprise that he replied no. The negotiations could have been handled by the Department much more professionally and I hope that in future that will be the case.

Mr. Ridley

The Committee may wish to follow up the question of what memorandum was put before it, but I was not aware of the point that my hon. Friend raised. The sale was not and could not have been normal. The House will remember when the possibility arose that Rover would be sold to the Ford Motor Company. As a result, there was virtually a public auction. We debated the matter many times in the House but it was impossible to resolve it because of the political temperature. Rover informed everyone involved that the position was extremely damaging to its business and at the time it lost market share. My right hon. and noble Friend had no alternative but to conduct exclusive negotiations with an acceptable British company and only one had expressed interest at that time. [HON. MEMBERS: "Not true."] At that time. After it had been announced that the deal would be negotiated exclusively, other companies expressed interest. It would have been wrong for my right hon. and noble Friend to go back on the undertaking that the negotiations would be exclusive.

Mr. Terry Davis (Birmingham, Hodge Hill)

If the financial arrangements were as straightforward as the Secretary of State suggests and were already available in the estimates presented to the House, why did his Department ask the National Audit Office to leave them out of the report published two days ago?

Mr. Ridley

As I said, we did not wish to draw attention to the arrangements in the July statement because it was important that the Commission should not reopen the whole matter. The matters that I reported were not relevant to the agreement that we made with the Commission. In view of the sensitivity of those facts, I thought it right that the PAC should decide for itself whether it was in the national interest to publish them. I regret that the PAC's right to decide has been pre-empted.

Sir Hal Miller (Bromsgrove)

Does my right hon. Friend recollect that about a month ago he was criticised for not keeping Jaguar British? Today he is criticised for keeping Rover British and for its success. Does he agree that the Opposition have no interest in the success of any British industrial company? Did we hear any request for a statement yesterday about the additional investment in the British motor industry? Will he reconsider his description of the Opposition as being wise after the event? It is clear that they are unable to appreciate the difficulty of valuing what was a bankrupt company trading insolvently under Government guarantees.

Mr. Ridley

The transformation in the health of the Rover Group after many years of decline and massive losses is justification for its sale to the private sector, if ever one were wanted. I agree that the Opposition are now to be described as unwise after the event.

Mr. Dave Nellist (Coventry, South-East)

Is the Secretary of State aware that tonight in Coventry many thousands of Rover workers will wonder whether we are witnessing the Government's incompetence or their corruption? Is it not clear that, with £600 million of cancelled debt, £60 million of underselling and the £38 million of back-handers revealed today, the privatisation of Rover was legalised theft? Is he aware that British Aerospace knew in advance of the land values, the value of subsidiary companies such as the Spanish company and Daf and of stocks and shares and is laughing all the way to the bank? The right hon. Member for Chingford (Mr. Tebbit) stayed in the Chamber long enough to make sure that the Prime Minister held her line at Question Time. Why is he not here now to make a statement about his previous role as Secretary of State for Trade and Industry from which he went directly to be chief adviser to the board of directors of British Aerospace? More than any other privatisation deal, this deal stinks to high heaven.

Mr. Ridley

Thousands of Rover workers wandering about Coventry will be grateful that their company is beginning to move ahead, investment is being put into it and the days of its failures and loss-making under public ownership have come to an end. The fulfilment of that goal makes worthwhile the deal that was done to achieve it. For the hon. Gentleman's benefit, to my knowledge no Land Rover assets have been sold.

Mr. Steve Norris (Epping Forest)

Does my right hon. Friend agree that with hindsight we are all millionaires? Does he further agree that any business man who was prepared to pay asset value for a company haemorrhaging hundreds of millions of pounds without the slightest realistic prospect of ceasing to do so would be considered insane? Is he aware that those of us who were anxious that the deal should go through were disturbed that at the last minute the board of British Aerospace was so unsure whether the sale should proceed that it delayed the final announcements to be made by the then Secretary of State? Is it not true that when the details of the events are examined it will be clear that according to commercial logic the Government did an exemplary deal in selling Rover to British Aerospace?

Mr. Ridley

I wish to disagree with my hon. Friend in one respect: many hon. Gentlemen, even with the advantage of hindsight, would succeed in losing millions. [HON. MEMBERS: "What did the right hon. Gentleman do?"]

Mr. Speaker

Order.

Mr. Ridley

My hon. Friend's other point, that British Aerospace hesitated on the eve of signing the deal, is absolutely true. I can confirm that it nearly decided to abort the takeover because it did not feel that it could live with the risks. It decided to go ahead, which is infinitely to the benefit of the workers and customers of the Rover Group.

Mr. Andrew Smith (Oxford, East)

Is it not the case that the Secretary of State cannot begin to understand the anger and anxiety of Cowley workers and their families during the whole period of the shameful conduct of the sale? Is it not evident that Conservative party political determination to sell Rover at any price and in any way has counted for everything and that the interests of the country, taxpayers and the work force have counted for nothing? Is it not essential that, in addition to seeing proper accountability to the taxpayer for taxpayers' money, any surplus arising to British Aerospace in this sorry affair should be invested in production and jobs at Cowley, not asset stripped?

Mr. Ridley

The deal has been done and cannot be reopened. I understand that British Aerospace intends to make massive investments in the Rover Group—more than £1 billion—to develop its capacity and model range for the future. That is precisely what the hon. Gentleman asks for.

Mr. Roger King (Birmingham, Northfield)

Is my right hon. Friend aware that the people of the west midlands will contrast this Government's support for the British motor industry and the glittering future that Rover Group now has in the private ownership of BAe with the glittering, wonderful future that the Labour Government gave the Meriden motor cycle co-operative?

Mr. Ridley

Yes. Because of the many changes that have taken place under this Government, the British motor industry is beginning to move ahead and to increase its market share in Britain and throughout the world. We shall see a large increase in motor car production in the years ahead.

Mr. Doug Hoyle (Warrington, North)

Does the Secretary of State realise that only one Conservative Member, the hon. Member for Hastings and Rye (Mr. Warren), seems concerned about taxpayers having a fair deal? [HON. MEMBERS: "We are all concerned about that."] Will the Secretary of State please answer his hon. Friend's questions? Why was the memorandum not put before the Select Committee on Trade and Industry? Is he aware that it is inadequate to answer that the Committee can now inquire into the matter? Does he agree that the memorandum should have been made available at the time? Was the Commission aware that if Rover were resold in the following five years, the group would not have to repay the £650 million, but only £400 million? In view of the disclosures, will the Secretary of State tell BAe that it cannot have until March before paying the £150 million, but must pay without delay because it has benefited from the swindle?

Mr. Ridley

If hon. Gentlemen have taxpayers' interests at heart, they should recognise that the £3.5 billion which was expended on the Rover Group while it was in the public sector was the biggest drain that could ever been placed on taxpayers' shoulders and that from now on Rover Group is beginning to pay tax which is to the taxpayers' benefit. My right hon. and noble Friend who handled the matter appeared before the Select Committee on Trade and Industry, and he must be allowed to give the evidence and produce the papers that he thought appropriate at the time. The hon. Gentleman is not right when he says that that £450 million will have to be repaid. The £650 million was the sum before the Commission reduced the amount which the British Government could give to assuage Rover's debts. As the Commission reduced the sum, it was right that the amount to be repaid should also be reduced.

Sir Giles Shaw (Pudsey)

Does my right hon. Friend agree, as one who had a part to play in the developments at Rover at a certain time, that the problem with the company, apart from wholly inherited debt and the fact that it was trading insolvently in all but name, was the fact that the Varley-Marshall agreement entered into by the Labour Government provided never-ending commitment to the Government of the day to stand behind every bill that the company happened to offer? Will he further consider that, while enormous efforts were made to maintain productive investment, this incredibly bankrupt company would have been closed long ago had it not been for the arrangements with BAe? Does my right hon. Friend agree that that was the real alternative offered?

Mr. Ridley

My hon. Friend is absolutely right. He talks of what came to be known as the Varley-Marshall-Joseph undertakings and they totalled £1.6 billion by March last year. I am extremely glad that they will never be known as the Varley-Marshall-Joseph-Ridley undertakings.

Mr. Simon Hughes (Southwark and Bermondsey)

Can the Secretary of State answer the questions that he has still not answered? How does he reconcile the uncorrected public announcement that if BAe sold Rover within five years the payback would be £650 million when it would be £400 million? How does he reconcile the Prime Minister's statement about the valuation in a letter to my right hon. Friend the Member for Yeovil (Mr. Ashdown) on 21 November 1988 that the value to be attached to assets … is at present purely speculative with his statement this afternoon that the price was reached by striking a reasonable balance between risks and objectives? How does he reconcile his declaration that he is in favour of no support, a strong competition policy within the EC and upholding the law with his subsidisation without telling the EC, thereby breaking the law and his own declared policy?

Mr. Ridley

The hon. Gentleman is wrong. The adjustment to the ceiling of any penalty for a sale within five years was indeed communicated to the Commission. It was twice reduced because the Commission reduced the original consideration. The conclusion of a valuation between a seller and a buyer must be the price at which the buyer is prepared to buy and the seller to sell. That is the price that was finally agreed last July.

Mr. Simon Coombs (Swindon)

Is my right hon. Friend aware that while Austin Rover was in the public sector the plant at Stratton near Swindon was a frequently mentioned candidate for closure and that since Rover has been in the private sector that plant has been the recipient of £ 17 million of new investment from BAe? Does my right hon. Friend draw any conclusion from that? Can he tell the Opposition how many new hospitals and schools could have been built with the money that for many years haemorrhaged into Austin Rover while it was in the public sector? Can he tell us what efforts he is making to find the person who leaked the document?

Mr. Ridley

On the latter point, it is not for me but for the PAC to re-establish its reputation for looking after the financial and confidentially financial interests of this House. I am glad to hear that the privatisation of the Rover Group has led to increased investment in my hon. Friend's constituency. It will lead to increased investment in many other constituencies as the momentum increases.

Mr. Geoffrey Robinson (Coventry, North-West)

In the light of the Secretary of State's answers this afternoon, the only thing for which the House can be grateful is that it was not he who negotiated the deal. If he had, it would have been an even bigger rip-off than it was. [Interruption.] We have yet to receive a successful answer to two shocking revelations, first, that not one penny has yet been paid by BAe and, secondly, that the British Government surreptitiously paid £38 million. [Interruption.] Finally—[Interruption.]

Mr. Speaker

Order. The hon. Gentleman must have a chance to put his questions.

Mr. Robinson

Is the right hon. Gentleman aware that, in the light of those revelations and the inadequacy of his answers about them, the Government have forfeited any remaining claim that they ever had to be from the party of financial responsibility and managerial competence?

Mr. Ridley

It is a rare and well deserved tribute to my noble Friend Lord Young that the hon. Gentleman believes that he negotiated an even better deal than I would have done. I am grateful to the hon. Gentleman. I have dealt with the rest of his questions because I gave full, open and satisfactory answers to all the points that were raised.

Several Hon. Members

rose—

Mr. Speaker

Order. I remind the House that there is another statement today and a debate on a Public Accounts Committee report. I understand that the Public Accounts Committee is to discuss this matter tomorrow and no doubt we shall return to it later. I will allow three more questions from each side and then we must move on.

Mrs. Maureen Hicks (Wolverhampton, North-East)

As a west midlands Member and the proud owner of a British Rover car, I feel duty bound to pay tribute to the success of Rover in private hands. Thanks to the vision of the Government, Rover has gone from strength to strength and has secured the jobs of many midlands workers. Will my right hon. Friend confirm that the Government dealt exclusively with British Aerospace because of pressure from the House not to sell to an overseas company?

Mr. Ridley

My hon. Friend is quite right. I remember, although at the time I was not in the Department, the extraordinary political clamour surrounding the possibility of selling the company to Ford. Therefore, my noble Friend had no alternative, when he finally got a serious offer from British Aerospace, but to undertake to negotiate exclusively lest a situation such as that which had developed previously arose again.

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

Is it not clear that the noble Lord Young must have set out deliberately to mislead the European Commission by failing to indicate—

Mr. Speaker

Order. That is a reflection on a Member of the Upper House. The hon. Gentleman must withdraw that comment.

Mr. Campbell-Savours

If I have used a word that you wish me to withdraw, then I do so.

The Department misled the European Commission by failing to tell it that concessions were being made and that subsidies were being paid. What credibility do we now have with people in the European Community who have been complaining about the stiff position of the Government on the whole question of regional subsidies and sectoral support?

Mr. Ridley

That is not the case. My noble Friend considered that the agreements that he had made beyond the main deal in relation to the sale of the Rover Group did not come within the competence of the Commission in relation to state aid. I have explained why I think that that was right. If the Commission does not agree, it can comment in the future. We wait to see what it says.

Mr. James Cran (Beverley)

Does my right hon. Friend agree that in evidence to the Select Committee on Trade and Industry the chairman of Rover, speaking on behalf of his whole board, gave absolute backing to the Government on their action? The board gave as the precise reason for that the fact that it did not want a public auction and the consequential adverse effects that that would have on the dealer network, the work force and the customer.

Mr. Ridley

So far I have not heard any hon. Member question the fact that it was correct to engage in exclusive negotiations, and that is because of the reason that my hon. Friend has given. If that be so, no one could question the deal that was finally agreed with British Aerospace, especially as it was regarded at the time as extremely risky and unfair to British Aerospace to undertake such large risks for the consideration that they offered.

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

Can the Secretary of State tell us whether his permanent secretary as accounting officer for the Department has put in an accounting officer's minute complaining about what went on? Is the right hon. Gentleman aware that if the directors of a public company acted in the way in which he has acted, the fraud squad would long since have had them in the dock at the Old Bailey for corruptly defrauding their shareholders?

Mr. Ridley

My permanent secretary as accounting officer has made a complete disclosure to the Comptroller and Auditor General on all these matters. That is the confidential memorandum that the Public Accounts Committee is receiving. He has made no comment other than to make sure, as I have said, that the PAC was aware of all these matters.

Mr. Neil Hamilton (Tatton)

Does my right hon. Friend agree that it is rather quaint to hear Opposition Members complaining about an illusory loss of £38 million when we did not hear a peep from them about the loss of 100 times that amount—£3.5 billion—which can be laid at Rover's door over recent years? We wholly endorse the Government's position on the sale. The difference between my right hon. Friend and the Opposition is like the difference between a Rover Sterling and a Trabant.

Mr. Ridley

I entirely agree with my hon. Friend whose comments are borne out by what I have said. I enjoyed his description of the Opposition as a Trabant.

Mr. Eric S. Heffer (Liverpool, Walton)

Those of us who were in the Department of Trade and Industry when British Leyland and Rover were partners remember that the company had to be taken into public ownership because it was on the point of collapse. The Government of the day had no choice because they had to save the jobs of the people in the industry. If we had not taken the company into public ownership there would have been mass unemployment. Perhaps the right hon. Gentleman would have liked to see those workers being put out of work. Obviously, Conservative Members have a short memory about what actually happened. Because of the attitude of the right hon. Gentleman and the Government, money has been lost, although I am not saying that they had their fingers in the till. If they were councillors they would have been disqualified and surcharged. It is high time that the right hon. Gentleman resigned.

Mr. Ridley

If I were the hon. Member for Liverpool, Walton (Mr. Heifer) I would sit this one out and not admit to having played such a prominent role in the waste of the £3.5 billion to which I have referred.