HC Deb 15 July 1999 vol 335 cc554-5
7. Miss Julie Kirkbride (Bromsgrove)

What discussions he has held with the European Commission concerning state aids for Rover. [90014]

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

I have discussed the matter with Commissioner van Miert; my officials have also had detailed discussions with with Directorate-General IV.

Miss Kirkbride

The Minister will be aware of the great importance of this bid to my constituents who work at Longbridge and to investment and jobs in the midlands. Does he recognise the concern in the midlands that he has put the bid in jeopardy by announcing it prematurely before the Commission approved it, and that we are in an invidious position, as the Commission appears to be blackmailing us? Is the Minister aware of the Commission's double standards? Last year, the Commission agreed that France could spend £2 billion on its state industry, Air France, a decision that the European Court deemed illegal. The Minister's former leader then declared that he did not have to obey the court. Will the Minister bear in mind that double standard during his negotiations with the Commission?

Mr. Byers

For the record, and to help the hon. Lady, let me explain how applications for state aid are made to the European Commission. The procedures that we have followed are exactly those followed by our predecessor. When agreement is reached between the UK Government and the company concerned, an application is made to the European Commission. An application can only be made when the two parties agree, and that is the process in which we are involved. The previous Government went through the same process towards successful applications.

For the record, we have not put the aid—£129 million in regional selective assistance—at any risk because of the procedures that we have adopted. From my conversations with Commissioner van Miert, and from those of my officials and DG IV, the relevant department of the Commission, I am confident that we will succeed in achieving Commission approval for the application.

Mr. Richard Burden (Birmingham, Northfield)

May I assure my right hon. Friend that after months of uncertainty and negotiation, my constituents at Longbridge were pleased that the Government shared the details of the deal with them—as was their right—and that, now that uncertainty has ended, Rover can move to achieve its potential? Does my right hon. Friend agree that it is most important for west midlands Members of Parliament to try to contribute to stability rather than talking down Rover's success?

We have fought off substantial competition from outside the European Union to secure the deal and to ensure that work will commence this week to bring the new Mini to Longbridge. Will my right hon. Friend join me in hoping that the new Mini will be a world-class car for the millennium, bringing success to Birmingham and Rover as the Mini did in the 1960s, 1970s, 1980s and 1990s?.

Mr. Byers

This is one of those opportunities for all Members of Parliament, who have an interest in, and a concern for, the future of Rover—especially at Longbridge—to celebrate the fact that, this week, BMW began a £400 million investment in the new Mini line at Longbridge. In the months and years ahead, the company will build on that within its investment of more than £3 billion in Rover in the UK generally. We were able to secure that investment with £129 million of regional selective assistance, linked to improving skills and raising productivity. That is the new way for regional selective assistance in the future. Rover now has a real opportunity to become a world leader in car production. I urge all Members of the House—whichever party they represent—to celebrate the success that we have been able to achieve, and to work together to ensure that Rover has a real future as a major player in the world car market.