British Aerospace

HC Deb 28 June 1990 vol 175 cc510-20 4.46 pm

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Nicholas Ridley)

With permission, Mr. Speaker, I wish to make a statement on the decision reached yesterday by the European Commission following its review of the arrangements reached with British Aerospace regarding the sale of the Government shareholding in Rover Group.

The Government believe that, in the circumstances at the time, the additional concessions granted to British Aerospace were a necessary part of our agreement so that the privatisation of Rover Group could proceed. That deal brought considerable benefits: it freed the taxpayer from the contingent liability of the Varley-Marshall-Joseph assurances—that liability then amounted to £1.6 billion and was set to rise substantially over the corporate plan period. It ensured that Rover Group's needs would not in future require special Government aid, which had amounted to £3.5 billion while under public ownership. It safeguarded over 190,000 jobs, mostly in the west midlands, and it made a desirable contribution towards restructuring within the European motor industry.

Under BAe's ownership, the corporate plan is being fully implemented. Rover has already committed more than £500 million of new capital investment. The new model range is highly successful and the company has returned to profitability.

The Commission's principal decisions are as follows: that £150 million represented a reasonable purchase price for the company"; that the Government should provide an undertaking that any arrangement between BAe and the Inland Revenue will not allow Rover Group to use more than the £500 million of trading tax losses specified in the sale agreement with BAe, and that those losses will remain within Rover Group—I am, of course, very happy to give an undertaking that the terms of the sale contract will be adhered to; that BAe should automatically be required to pay financial penalties if there is any change in control of Rover Group or its principal subsidiaries before July 1993—we shall be exploring precisely what this means with the Commission; that the grant of £1.5 million towards Rover Group's costs incurred in the acquisition, and the £9.5 million contribution towards BAe's costs in buying out the minority shareholders, should be repaid; and that the benefit to British Aerospace of deferring payment of the £150 million consideration for Rover Group should similarly be repaid.

In relation to this deferment, the Commission has concluded the BAe should be required to pay an amount of £33.4 million, calculated as the estimated gross interest saving to the company. Fairness suggests that any such benefit, and therefore any repayment, should be assessed net of tax, thus reflecting the true value of the deferment to the company. We estimate that the equivalent post-tax benefit would be some £22 million, a difference of £1..4 million.

If the Commission's decision is on the basis of the gross interest saving, the net cost to BAe will depend on whether tax relief is available in respect of the repayment under normal United Kingdom tax law. The availability of tax relief on the £33.4 million will need to be settled in due course between British Aerospace and the appropriate tax authorities, and perhaps ultimately in the courts.

The Commission also notes that expenditure of aid agreed in 1987 for restructuring of the Leyland Daf commercial vehicle operation has been slower than anticipated, and it suggests the possibility that up to £40 million of that may eventually need to be repaid. It acknowledges, however, that that figure is speculative and that the final outturn of expenditure will not be known until next year.

As the Commission's efforts to bring all state aids within the Community under control are beneficial for the development of the single market, the Government believe that it is important to support them. We have thus always acknowledged its ultimate right to reach its own judgment on the status of those additional arrangements in the context of the 1988 decision. We also accept that any benefit received by a company which the Commission properly decides is a state aid incompatible with the treaty should be repaid.

Equity suggests that the repayment should represent the net value of the benefit received by the company and not contain any unintended element of penalty. We are therefore concerned that the Commission has decided on £33.4 million in respect of the interest when the estimated benefit to British Aerospace is some £22 million, handing down a decision in gross terms without regard to whether or not the repayment will be allowable against tax under normal United Kingdom law.

We shall, accordingly, wish to give careful consideration to that aspect of the decsion and to any representations by BAe. Subject, however, to that, the Government, having carefully studied the arguments and to demonstrate our support for Community policy on state aids, have decided to accept the Commission's decision on repayment. We shall be discussing with the Commission and British Aerospace other detailed matters raised in the Commission decision. I am advised that British Aerospace will consider its position in the light of this statement and after studying the Commission decision in detail.

Mr. Gordon Brown (Dunfermline, East)

Given that the Minister said in his final few words that the Government will accept the Commission's general verdict to repay, will he now confirm that the Government wrongly gave away millions of pounds of taxpayers' money by deferring payment of the Rover purchase price, and that Parliament should have been but was never properly told?

Will the right hon. Gentleman confirm that £9.5 million of British Aerospace's costs in acquiring Rover were wrongly paid by the Government and that the House was deliberately kept in the dark? Will he confirm that £1.5 million of Rover's costs for being acquired were wrongly paid by the Government and that Ministers delivered as a matter of policy not just to deceive the European Commission but to deceive Parliament as well? Will he also confirm that, far from the matter being closed, the European Commission has demanded a full report into tax concessions and tax allowances that might have resulted from a series of private meetings involving the Department of Trade and Industry, the Inland Revenue and British Aerospace? Will he now tell the House his estimate of the full value of those concessions?

Will the right hon. Gentleman now confirm not only that money was illegally paid but that, as the correspondence give to the House demonstrates, Ministers entered into an elaborate web of deception, even to the extent of a detailed discussion of the risks of being found out?

Will the right hon. Gentleman confirm that Ministers actually considered how omissions in the national accounts might or might not be spotted, at least by some hon. Members, that they actually considered presenting late payments of cash just as if they had been made earlier and that there was within Government an ascending order of risk that secret concessions might be picked up by the European Commission?

In those circumstances, how can the right hon. Gentleman come to the House today and justify such abuses as what he calls necessary behaviour? Is he seriously telling us that, in other sales of public assets to private companies, the Government would offer similar hidden subsidies and mislead yet again?

Will the right hon. Gentleman now say what responsibility the Prime Minister, who says that she was consulted on the details of the deal, is prepared to shoulder for the errors of judgment and the deception? As for the Government's responsibility to Parliament, will the right hon. Gentleman say why, after nearly two years, after a critical National Audit Office report and after this damning new judgment from the European Commission, there has been as yet no full explanation of events, no apology, no admission of responsibility, no statement of who is to accept the blame and no new rules proposed to prevent similar abuses during the sale of public assets to private companies in future?

Does not this sorry and shameful tale of incompetence and deception—incompetence even in deception—now followed by this humiliating public rebuke in the front of the whole of Europe emphasise that the short-term obsession with privatisation at any price and at any cost overrode all considerations of the public interest, up to and including the good name and integrity of government?

Mr. Ridley

I answered the hon. Gentleman's first questions in my statement. He went on to suggest that the Government had misled Parliament. I repeat that each of those items was properly reported. The deferment of the consideration and the payment of the £1.5 million to Rover Group were reported in a revised summer supplementary estimate laid before Parliament on 14 July 1988, the day of the announcement. The payment of £9.5 million to BAe was reported in the 1989 Industry Act report. All the facts were made available to the National Audit Office at the outset of its investigations. So the hon. Gentleman is wrong about that.

The Government have agreed to accept the Commission's findings and to implement them. Is the Labour party now prepared to accept the Commission's findings and to stop making such charges as that the Government undervalued the Rover Group? As the Commission said: £150 million represents a reasonable purchase price for the company. So may we have a withdrawal of that accusation from the Labour party?

Secondly, the hon. Gentleman has written three times to me and once to the Prime Minister, and many times he has been to the media, and accused the Government of separate tax concessions, hidden tax deals, fiddles on the tax side and secret meetings. That is not true. I want from him an apology and I want him to undertake to withdraw those allegations. He should either put up or shut up.

Mr. Kenneth Warren (Hastings and Rye)

Now that the Commission has given its decision, may we hope that both sides of the House will recognise the high value to this country of the Rover and British Aerospace enterprises? Will my right hon. Friend make available in the Library of the House in its entirety the correspondence that he has received from the Commission? May I ask him, not as Chairman of the Select Committee on Trade and Industry but as a Back Bencher, to give the House an assurance that there was never any intention by Her Majesty's Government to deceive Parliament?

Mr. Ridley

I agree with my hon. Friend about the great value to the country and taxpayer of Rover Group passing into the private sector and being owned by British Aerospace. Indeed, from what the hon. Member for Dunfermline, East (Mr. Brown) said, it seems that he regrets that bitterly and wishes that it was still losing money in the public sector.

I have not yet formally received the full decision letter from the Commission. I have no doubt that it will appear in the newspaper columns even before I receive it, so it will become a public document. I have already answered the question about the presentation of these matters to Parliament, which should end that matter.

Mr. Alex Carlile (Montgomery)

Will the right hon. Gentleman say whether, prior to approving the British Aerospace-Rover deal, the Prime Minister and the then Secretary of State for Trade and Industry were advised that some aspect of it were likely to be regarded as unlawful?

Mr. Ridley

My predecessor, Lord Young, obviously received legal advice from the Department. He alone must be responsible for the advice that he received. I have not seen his legal advice.

Mr. Roger King (Birmingham, Northfield)

Does my right hon. Friend accept that, in relation to some parts of the European Commission's findings, one could argue that a state company, if it wants to sell something, must first ensure that it owns it, and an element of purchasing the minority shareholding should not be construed as a form of state aid? Notwithstanding that, will my right hon. Friend reflect that the working people of the west midlands, so many of whose jobs depend on this business, have looked forward to, and worked to establish, a prosperous and profitable company? Had that business not been privatised—the negotiations were certainly tricky—with a British solution, we might be here now discussing a European Commission directive to prevent the state further subsidising a state business?

Hon. Members

Come on, Tricky Nick.

Mr. Speaker

Order.

Mr. Ridley

I entirely agree with my hon. Friend's last point, because if the company had still been in public ownership, there is no doubt that there would have been a state aid ruling that we should desist from pumping taxpayers' money into it. I would have been pleased to see it, but that is what we would have had. This is a different matter.

I think that my hon. Friend's first point is logically right. The owner of a company should be able to become a 100 per cent. shareholder. I cannot contest that the Commission has come to a different conclusion, which the Government have decided to accept.

Mr. David Nellist (Coventry, South-East)

Is the Secretary of State aware that, while he may be relieved that sticky fingers were rapped yesterday only to the tune of £40 million, most car workers in Coventry and the west midlands are still unsure whether, in the past few months, there has been Government incompetence or corruption? In any event, the case still stinks to high heaven. Some £3.5 billion of public, taxpayers' money has been put into, first, British Leyland and then Rover. Once that car company reached a position of stability, the people whose money was put into it should have had the return; the money should not have been given away to British Aerospace. That is what this is all about—we are talking about not just £40 million, but the fact that a public asset was given away to the Secretary of State's mates.

Mr. Ridley

Car workers in the west midlands and the hon. Gentleman's constituency will be only too grateful that they have good, secure jobs in an expanding, successful company, and are not at risk from a state aid directive stopping us pumping money into a bankrupt nationalised enterprise.

Sir Hal Miller (Bromsgrove)

Will my right hon. Friend confirm the facts of the case, which are that Rover was successfully sold to a British company when there were no other applicants and the Opposition had objected to a previous suggestion that Ford and General Motors might take over responsibility for the company; the taxpayer was relieved of the burden of guarantees to £1.4 billion and of the necessity of undertaking an investment programme of £1 billion, which would now, no doubt, have had to be repaid; there was then a considerable risk that the two new models would not be the successes that they were; and there was a heavy, overhanging liability for the redundancy payments for the work force? Therefore, we should all be pleased that the matter is a success, instead of indulging in conspiracy theories, muckraking and the denigration of a successful British company and successful British workers.

Mr. Ridley

I entirely agree with my hon. Friend. I remind the House of the words of the hon. Member for Dagenham (Mr. Gould) on 4 May 1988, when he was the shadow Secretary of State for Trade and Industry: If we are really concerned about the future of the Rover Group and volume car manufacturing in this country under British ownership and control … we need the commitment of an owner who is willing to make the long-term investment that is required. We need an appreciation by the owner of the long-term importance of the industry to the British economy. We need pride of ownership."—[Official Report, 5 May 1988; Vol. 132, c. 941.] We have achieved that as a result of the BAe deal, but the Labour party is now carping, criticising and wishing it had never happened.

Mr. Alan Williams (Swansea, West)

Is not the crucial and central point of the decision that has been handed down that the Government behaved illegally? In so far as they did so, why on earth has the Secretary of State come here today without having checked on the legal advice given to his predecessor? While we accept that he is not allowed to see advice given to a previous Government, surely if he is coming to answer questions in the House on illegal conduct by Her Majesty's Government, he should at least have checked the records to find out how the decision was arrived at.

Mr. Ridley

No such question arises. The Government have decided to accept the Commission's report for the reasons that I have given. There is no point in the right hon. Member trying to prove something of that sort. We ultimately made our decision in the way that I have described.

Mr. Paul Channon (Southend, West)

Does my right hon. Friend agree that what really matters in this case is that we have a prosperous, efficient, car industry in this country in which people have good jobs? Does he agree that, in the past, the Opposition have sabotaged any effort made to try to put the company on a profitable footing? Does he also agree that the British taxpayer has poured billions of pounds into that company and was liable to pour in even more billions of pounds, and the solution that he and his predecessors adopted not only saved the taxpayer a great deal of money, but provided a prosperous car industry for this country in future?

Mr. Ridley

My right hon. Friend is absolutely right and I applaud his part in the final outcome when he had the job that I now hold. This is what the whole House said that it wanted in May 1988, but now that we have actually got it, the Opposition appear to have changed their mind and want to go back to the old bad days.

Mr. Doug Hoyle (Warrington, North)

Will the Secretary of State stop attempting to defend and whitewash the Government's actions in their attempts to deceive the House, the European Commission and the general public by hiding the sweeteners given to British Aerospace—efforts of which the Prime Minister was aware? Instead, will he thank and support the vigilance of the Comptroller and Auditor General in unearthing this deception? Will he take his responsibility for the setting up of the slush fund and resign, along with the Prime Minister?

Mr. Ridley

I assure the hon. Gentleman that to the last of my days I shall continue to defend the Government and attack the rabble on the Opposition Benches. In answer to the hon. Gentleman's second point, we made a full report to the Comptroller and Auditor General, which he passed on to the Public Accounts Committee. The House was fully informed because, from that process, publication was made—I am not saying by whom—which was the right way to carry out the procedure.

Mr. Michael Grylls (Surrey, North-West)

Does my right hon. Friend agree that most sensible people in the House and outside will observe that, after months of study by the Commission, there has been no criticism whatever of the price at which this company was sold to British Aerospace? Synthetic opposition is voiced by Labour Members simply because they cannot bear to see that the company has been successfully privatised and is prospering. Jobs are very much safer and productivity has improved. It has become a highly profitable British-owned motor car firm, and we should be proud of that.

Mr. Ridley

The force of my hon. Friend's arguments has driven the Leader of the Opposition from the Chamber because he could not take any more. Opposition Members are looking as glum as can be, and the Leader of the Opposition, who should be leading from the front, is not about. My hon. Friend is right. Political point scoring is more important to the Labour party than the successful future of the Rover group.

Mr. Stan Crowther (Rotherham)

It would be in everybody's interest for the Government to drop their policy of subterfuge and cover-up. How can the Secretary of State pretend that all the facts were made known at the time, when it is perfectly obvious that, if they had been fully reported to the House and the Commission there would have been no need for the second Commission inquiry or the second inquiry by the Select Committee on Trade and Industry which hopes to report shortly? How can he pretend that the facts were made known, when it is perfectly obvious that they were hidden?

Mr. Ridley

I resent the use of the word subterfuge. On behalf of the Government I have accepted the Commission's report. I have not heard the Opposition or the hon. Member for Dunfermline, East (Mr. Brown) say that they accept it. The scandalous charges that he has been making should now be withdrawn.

Sir Anthony Grant (Cambridgeshire, South-West)

The Commission has quite clearly found that British Aerospace received no special tax treatment and that Rover Group was not overvalued. In view of that, will my right hon. Friend once again invite the hon. Member for Dunfermline, East to withdraw his wild and irresponsible remarks? If the hon. Gentleman is not big enough to do that, will my right hon. Friend put that crazy correspondence in the Library so that the House can judge the credibility of the Opposition's attack?

Mr. Ridley

My hon. Friend is right. I repeat the invitation to the hon. Gentleman to withdraw his allegations. I have already put in the Library all the correspondence with the Inland Revenue and the House has seen it. I shall certainly place in the Library my correspondence with the hon. Gentleman, and the House can judge him as well.

Mr. Stuart Bell (Middlesbrough)

The Opposition are simply trying to hold the Government accountable. For once it would be nice for the Secretary of State to come to the House and accept responsibility for a Cabinet decision. Does he agree that the Commission, rather than the British Government, has had to defend the British taxpayer? According to the Secretary of State's own figures, £33.4 million, £9.5 million and £1.5 million have to be repaid. That is a total of £44.4 million. He says that the Government will implement the Commission's decision. When and how will they collect the money, and when will they stop wriggling on this specific matter?

Mr. Ridley

I am in the House accepting responsibility on behalf of the Government. We are discharging our obligation to tell the House what the Commission has decided and what the Government have decided to do in response. If the hon. Gentleman thinks that the taxpayer is protected by this decision of the Commission, without paying any heed to the £3.5 billion of taxpayers' money which went down the drain before this deal was ever done, he has another think coming.

Dr. Keith Hampson (Leeds, North-West)

Does my right hon. Friend accept that two critical aspects of the matter have been ignored by the hon. Member for Dunfermline, East? First, two years ago under a different Commissioner, it was not at all clear that the deferment of the purchase price, which is by far the largest element in the extra package, would be categorised as state aid. Secondly, at the heart of the matter is the fact that in early July two years ago it was by no means certain that the British Aerospace board was united in wanting to take on this huge loss-making operation with staggering liabilities. Without the extra £30 million package British Aerospace would not have bought Rover and it would not now be British and as successful as it has become.

Mr. Ridley

I have accepted the Commission's decision about the nature of the benefit that arose from deferring the interest on the £150 million for 20 months. However, I question whether it is right that the benefit to British Aerospace of that deferment, which was about £22 million, should result in that company being asked to repay £33 million. That seems to be a point which we can legitimately raise. My hon. Friend is right when he says that there was considerable reluctance on the part of British Aerospace to proceed at all. The hon. Member for Dagenham (Mr. Gould) said in the House that he thought that it was a rotten deal for British Aerospace shareholders, and many City commentators suggested at the time that the shares should be marked down.

Mr. Chris Mullin (Sunderland, South)

Can the Secretary of State give the House a categorical assurance that neither these nor similar arrangements applied in any other privatisation deal?

Mr. Ridley

I cannot quite understand how the hon. Gentleman is saying that there is something here which is different in relation to any other privatisation. I think that each case has to be taken on its merits and I am very happy to defend this privatisation as one of the most successful launches of a new motor company that we have seen for a long time.

Mr. Robin Maxwell-Hyslop (Tiverton)

Will my right hon. Friend confirm that one of the most important considerations in the Government's mind must have been the preservation of the sales network of Rover Group dealers in the United Kingdom and abroad? Is he aware that, when the Trade and Industry Committee looked at the collapse of the Rootes motor group, which was rescued by Chrysler, the evidence given by the dealers to the Committee was that the whole sales network was collapsing hour by hour because of the uncertainty? Does he agree that there was a severe risk to the whole future of the Rover group if the quickest possible reasonable sale had not been consummated?

Mr. Ridley

My hon. Friend is entirely right about that. It is crucial to the on-going success of a motor company for the dealer network to remain intact and loyal. The continued uncertainty, much of which was caused by the Opposition making a tremendous fuss about any possible purchaser for Rover Group, had made the dealer network rather jittery. That was the reason for the urgency in July 1988.

Mr. Dennis Skinner (Bolsover)

The Attorney-General has been sitting stony-faced throughout the statement. Will the Secretary of State confer with him and obtain confirmation that the Prime Minister and Lord Young were told that this deal was unlawful?

Mr. Ridley

I would never dream of accusing the hon. Gentleman of being stony-faced. My right hon. and learned Friend the Attorney-General is the soul of delightful company and wit—when he is not taking his responsibilities very seriously, as of course he is now. He is completely satisfied with my statement and what I have told the House, and I have nothing further to add about the legal advice received by my predecessor.

Mr. Tim Janman (Thurrock)

Will my right hon. Friend confirm that Commissioner Millan, a former Labour Member, voted against the Commission's recommendation on the basis that he wanted its action to be even harsher? Does my right hon. Friend agree that it would be outrageous if he did that in an attempt to gain party political advantage? Does he further agree that Commissioner Millan may well have been put up to it by the hon. Member for Dunfermline, East?

Mr. Ridley

I hope that the hon. Member for Dunfermline, East will respond to that point. We have had a remarkable silence from him about his rather unsavoury part in these affairs and I hope that he will respond to my hon. Friend. I think that it is true that the only Commissioner who voted against the recommendation in the hope of achieving a tougher settlement against British Aerospace was Commissioner Millan.

Mr. Bob Cryer (Bradford, South)

Is it not true that many people believe that the Secretary of State has got off extremely lightly with a helpful report from the former Tory Minister Leon Brittan, who was himself severely criticised by a Select Committee for his duplicity? Will the Secretary of State now confirm clearly that he, Lord Young and the Prime Minister received information that the rip-off of hundreds of millions of pounds from the taxpayer was illegal?

Mr. Ridley

The hon. Gentleman's last statement is absolutely untrue. I must rebut that entirely. The hon. Gentleman is quite wrong in his first point as well.

Mr. Charles Wardle (Bexhill and Battle)

Is not the kernel of the matter the fact that the amount now demanded by the Commissioners confirms their judgment that the assets sold were not undervalued?

Mr. Ridley

Yes, that is an important point. It is not just that the Commissioners felt that they could not reopen the decision of Commissioner Sutherland; it was on the merits of the case as set out in their letter that they came to the conclusion that the valuation which my right hon. and noble Friend Lord Young accepted with British Aerospace at the time was correct. We are still looking for a withdrawal from the hon. Member for Dunfermline, East of his statement only eight days ago in the House to my hon. and learned Friend the Minister for Industry that there was a gross undervaluation. It is time that he withdrew that.

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

If there was no deception, why does the letter that I have here, signed by Lord Young, show a deception in relation to repayment and notional interest rates saved? Is it fair that a company valued by Nikki Securities of Japan at £1,000 million today should have been sold for only £150 million a couple of years ago?

Mr. Ridley

The hon. Gentleman puts his own interpretation on things. I prefer to believe what the Commission said. It is probably more impartial and has more sense than the hon. Gentleman. I am happy to see what the Commission says about valuation and I, too, am prepared to accept that.

Several Hon. Members

rose—.

Mr. Speaker

Order. In view of the importance of the next debate, in which some hon. Members who are now rising are anxious to participate, I shall call three more Conservative Members and the Opposition Front-Bench spokesman and then we must move on.

Mr. Jonathan Aitken (Thanet, South)

I congratulate my right hon. Friend on his relaxed demeanour in the face of this synthetic little storm in a Dunfermline teacup. It is now obvious that the Government took the right decision to stand by Rover and obtain a good deal for the British taxpayer and preserve jobs, and are also probably right reluctantly to abide by the Commission's ruling. But on that point does my right hon. Friend share my cynical view that the so-called level playing field in European competition rulings is full of political lumps, and that he might not have been asked to repay £40 million if Renault had not been asked to repay £1.2 billion some months ago, which it has not yet done?

Mr. Ridley

I agree with my hon. Friend about the Dunfermline teacup. We were promised a firebrand, an effective Opposition spokesman, in the hon. Member for Dunfermline, East, but I am afraid that he has proved a great disappointment. We wish that he could sometimes put some good points for us to answer. In fact, he sits on his bottom and does nothing most of the time.

On the serious point made by my hon. Friend, it is a little disturbing that there have been rumours in the newspapers of the matter being treated by the Commission as some sort of political punishment which is negotiable. My concept of state aid is that it should be a precise calculation and that that alone should be what it asks to be repaid.

Mr. Edward Leigh (Gainsborough and Horncastle)

Further to the question asked by the hon. Member for Workington (Mr. Campbell-Savours), have not some people forgotten that at the time people said that the Varley-Marshall guarantees of more than £1.6 billion were an enormous albatross round the neck of Rover? Indeed, the hon. Member for Dagenham (Mr. Gould) asked the House whether it was true that institutional shareholders had already been telephoning to express their objections. People forget such things now. Will not most reasonable taxpayers come to the conclusion that they have had a good deal? The Government have offloaded a loss-making, ramshackle organisation which was sending £1.6 billion down the pan and now have a profitable British company.

Mr. Ridley

My hon. Friend is right, but it does not seem to matter how successful the Government's economic and industrial strategy is, Opposition Members simply want to find party political points to make against us.

Mr. Andrew MacKay (Berkshire, East)

May I bring my right hon. Friend's mind back to the role of the hon. Member for Dunfermline, East (Mr. Brown)? Is not it right that the Commission has clearly reported that there was no special tax treatment for British Aerospace and that there was no undervaluation of Rover for British Aerospace? In the circumstances, when we continually ask the hon. Member for Dunfermline, East to withdraw the allegations that have now been proved to be false, why does the hon. Gentleman not do so? Would my right hon. Friend care to speculate on his motives?

Mr. Ridley

I endorse every word of my hon. Friend's question. The hon. Member for Dunfermline, East may wish to—

Mr. Gordon Brown

Answer the question. What has the Commission said about the tax concession?

Mr. Ridley

No, my hon. Friend asked me to speculate on the hon. Gentleman's motives for not coming forward and making a clean breast of the fact that he has got it wrong. I could do that, but, although I have not found the hon. Gentleman very damaging these past two months, I have developed a certain affection for him, so I will not press the point.

Mr. Doug Henderson (Newcastle upon Tyne, North)

Of the many questions which still remain unanswered, will the Secretary of State give a clear answer to two? First, will he confirm that the European Commission has demanded further written information on the tax concessions given to British Aerospace? Secondly, when the Secretary of State puts correspondence in the Library, will he include with it the legal advice that was given to Lord Young and the Prime Minister?

Mr. Ridley

I am afraid that the hon. Member for Dunfermline, East has not responded to the question posed by my hon. Friend the Member for Berkshire, East (Mr. MacKay). He seems to be completely unable to speak.

I am delighted to answer the two questions put by the hon. Member for Newcastle upon Tyne, North (Mr. Henderson). He has my assurance that all documents on the matter that are not normally kept confidential will be placed in the Library. Documents between the British Government and the Commission are treated as documents between two Governments and are not normally released, but the hon. Gentleman will have no difficulty in obtaining any information that he wants. I can give him an assurance that we have no difficulty whatever in answering the points about the tax treatments, which are mainly, I think, due to the Commission's failure to understand how the system works.