HC Deb 30 March 2000 vol 347 cc475-80
1. Mr. Michael Fabricant (Lichfield)

If he will make a statement on the future of Rover's Longbridge plant. [115660]

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

As the House knows, on 16 March BMW announced that, due to escalating losses, it intended to sell Rover Cars. Since then, BMW has said that it will do all it can to minimise the number of jobs to be lost. BMW has also committed itself to co-operating with the taskforce, which has as one of its objectives the development and regeneration of the Longbridge plant.

Mr. Fabricant

Given that the Transport and General Workers Union estimates that 40,000 jobs will be lost in the west midlands with this Alchemy deal, why has the Secretary of State consistently refused to make a statement in the House so that he can be questioned on the Floor of the House for a sustained time? Does he not realise that there have been clear signs since September that Rover would be losing at least 2,000 jobs, quite apart from the collapse of Longbridge? If he denies that—and it seems that he does—will he now undertake to publish all correspondence between the Department of Trade and Industry and Rover-BMW and any minutes of meetings between Rover and the DTI?

Mr. Byers

This clearly is an important issue and the House needs to address it. That is why I answered a parliamentary question just the other day, and why I am answering questions here today. It is an opportunity for the House to consider these matters. As the hon. Gentleman will know, the Select Committee on Trade and Industry is taking evidence on these matters. I will be giving evidence before the Committee next Wednesday, which I think will be the appropriate time to put on record the dealings between myself, my Department and BMW.

Mr. Richard Burden (Birmingham, Northfield)

Does my right hon. Friend share my disappointment that the hon. Member for Lichfield (Mr. Fabricant), in talking about the impact on the west midlands, did not give his support to the rally that is taking place this Saturday in Birmingham in support of Rover? Has not the most appropriate comment on who knew what over the past few months come in the past few days from Professor Milberg at BMW, who said on Tuesday that although he felt that he had been entirely open over the months, he now realised, with the benefit of hindsight, that his statements may have been interpreted differently? It seems that BMW itself recognises that it has not been entirely straight.

Is it not important that we move on and give BMW a clear message that its decision about the future of its plants is not simply a commercial decision, but one which affects the communities in which its workers live, and that it should take the interests of those communities into account when making its decisions?

Mr. Byers

My hon. Friend, as the constituency Member of Parliament, makes an important point. In all of this, the Opposition will try and score cheap political points, while we are concerned about protecting as many jobs as we can for those workers affected by BMW's decisions.

My hon. Friend also makes the important point that BMW executives have, in the past two days, gone on the record. Professor Milberg, the chairman of BMW, said on Tuesday that with hindsight he could have been clearer. Just yesterday, before the Select Committee on Trade and Industry, Professor Samann, who is head of Rover in the United Kingdom, said that the DTI had not been informed because the information was market sensitive. Those are on the record comments by senior executives at BMW.

Mr. John M. Taylor (Solihull)

One of the concerns at Longbridge, and in the Rover group generally, is about the future security of the pensions of retired employees. Will the Secretary of State use his good offices to procure a reassuring public statement about that, bearing in mind that there are retired employees of Land Rover in my constituency?

Mr. Byers

The hon. Gentleman makes an important point. Present and former employees are clearly concerned about their pension entitlement. We have raised the issue within government with the Department of Social Security. I also raised it specifically with Professor Milberg last Thursday, when I met him to discuss the consequences of BMW's decisions. He gave assurances about the pension funds. I will, after Question Time, be in touch with him again, and will ask him to make a public statement on this matter.

Mr. Martin O'Neill (Ochil)

When some of us visited Longbridge yesterday, one of the most telling remarks that we heard was that major contracts were still being signed for the development and construction of new parts of the plant until three weeks ago by senior management. Is that not evidence that even those responsible for Longbridge did not know what would happen? To suggest that my right hon. Friend the Secretary of State should have some additional information is both ridiculous and misleading.

Mr. Byers

My hon. Friend makes an important point, which confirms what Professor Milberg said at the Geneva motor show on 28 February, just a few weeks before BMW's decision. He said: I have absolute, serious and steadfast commitment to Rover and the United Kingdom. Only later did BMW begin to discuss the possible disposal of Rover.

Dr. Vincent Cable (Twickenham)

Does the Secretary of State still subscribe to the belief that an overvalued exchange rate was just an excuse for BMW management, or does he agree with the leaders of the Amalgamated Engineering and Electrical Union and the Transport and General Workers Union who said this morning that the overvalued exchange rate is the biggest difficulty facing the British car industry?

Mr. Byers

BMW's record is clear: it says that the strength of sterling was one of the reasons for escalating losses. However, just 20 miles down the road in Coventry, Peugeot is enjoying record production and record exports, showing that some car firms in the UK are highly successful. That must lead us to ask about BMW's overall approach towards Rover.

Ms Julia Drown (South Swindon)

My right hon. Friend knows that the future of many workers is linked to the future of Longbridge. They include 2,500 Rover workers in my constituency and that of my hon. Friend the Member for North Swindon (Mr. Wills). Will my right hon. Friend ensure that the help that the Government are offering Longbridge will be available to tackle the uncertainties and difficulties facing those workers?

Mr. Byers

I fully understand the concerns of workers in Swindon about the uncertainty created by BMW's decisions. I hope that BMW will be able to give those workers some guarantees about the future. If a decision is taken that affects those workers' livelihoods, the Government will provide support in the same way as we are providing it for those affected at Longbridge by BMW's decisions.

Sir David Madel (South-West Bedfordshire)

Suppliers to the midlands car industry whose plants lie outside the midlands—including those in Bedfordshire—are extremely concerned about what is happening at Rover. Will the Secretary of State ensure that both management and unions working in those plants are involved in the new taskforce that he is setting up to try to solve the problem?

Mr. Byers

Yes. There must be great concerns about the effect down the supply chain of the decision taken by BMW. When I met BMW management last week, I asked the company to disclose an inventory of its suppliers so that we could contact them. That information has been provided, and contact will be made with engineering companies and manufacturers—wherever they are located, including outside the west midlands—which will clearly be affected by BMW's decisions.

Mr. David Winnick (Walsall, North)

Will my right hon. Friend bear it in mind that there is deep concern and anxiety about jobs throughout the west midlands, not least in the black country where there are many suppliers of components for the motor industry? Perhaps the principal reason for concern about jobs in the west midlands is the memory of what happened in the 1970s, 1980s and early 1990s, when thousands of jobs were destroyed as a result of the policies of the previous Government. We should not forget that for one moment.

Mr. Byers

My hon. Friend makes an important point. Just 10 years ago, about 1 million manufacturing jobs were lost because of the Conservative party's policies. We must not lose sight of the fact that we should be asking today about the future of those affected by BMW's decisions. That is what a responsible Government would do, and that is what we are doing. The Conservative party might want to divert us down a different road for party political reasons of its own. So be it. The efforts of the Department of Trade and Industry will be clearly committed towards securing a future for the people affected by the BMW's decisions.

Mr. John Redwood (Wokingham)

The Secretary of State must be feeling very nervous today without there having been a word of comfort or support from the Prime Minister yesterday. So bad is his position that he was not even said to be unassailable. Will he now tell us the truth? Either he knew full well that Rover was in difficulty and BMW had to take radical action, in which case he misled and let down the workers of Longbridge, or he knew nothing about it, in which case he is totally incompetent and should not be in the job. Does he now accept that the decent thing to do would be to go before more damage is done? Let us have a truthful Secretary of State who understands the needs of manufacturing industry.

Mr. Byers

That was a bid for the shadow position held by the hon. Member for Tiverton and Honiton (Mrs. Browning). I say to the right hon. Gentleman, in all seriousness, that I have a degree of respect for his position because at least he has tabled questions to me about the issue, whereas the hon. Lady has not tabled a single question—[Interruption.] Not a single question. [Interruption.] She has not—

Mrs. Angela Browning (Tiverton and Honiton)

That is not true.

Madam Speaker

Order. The House must come to order.

Mr. Byers

The right hon. Gentleman raised the important question about who knew what, when and why. I know that yesterday the Leader of the Opposition, at Prime Minister's questions, spoke about a report in the Daily Mail from an unnamed source claiming that on 20 December Professor Milberg told me: We may have to reconsider our whole investment in Britain altogether. Professor Milberg has made no such statement in any telephone conversation or letter. Moreover, there was no telephone conversation between us on 20 December.

Mrs. Browning

Having just heard the Secretary of State's wholly inaccurate response about tabled questions on the subject of Rover, he has only confirmed what we all suspected—that not only does he never read newspapers or his own papers, he does not read parliamentary questions either. He knows that it is grossly unfair to have said something which he must know is inaccurate. [HON. MEMBERS: "Apologise."] The right hon. Gentleman continues to claim that all this has come out of the blue—[Interruption.]

Madam Speaker

Order. I want to hear the hon. Lady.

Mrs. Browning

—yet since last December there have been newspaper articles with headlines:

and Does not the Secretary of State or anybody in the Department of Trade and Industry read newspapers and think that if an article is about something that they have brokered a deal on, it might be common sense to pick up a telephone and initiate a call to see exactly what is going on? Can the Secretary of State now, as a rehearsal for the scrutiny that he will receive next Wednesday from the Select Committee, answer one straightforward question: on what date did he personally first realise that the future of Longbridge was in doubt?

Mr. Byers

I think that that is the sort of question that Members will not take seriously. The reality is that one does not take decisions based on newspaper reports. The hon. Lady will be well aware that the degree of speculation about the future of Rover and BMW is well known in the media. There is speculation before every supervisory board meeting. As Secretary of State, I speak on the telephone to the chairman of BMW, I hold meetings and talk to the company, and I ask questions to find out about the situation.

At a meeting on 10 March, six days before the supervisory board meeting, I raised specific questions about how the company would tackle its escalating losses. I received assurances about the steps that were to be taken. None of those steps involved the disposal of Rover by BMW.

Mrs. Browning

I hope, then, that the Secretary of State will reassure not only the House, but the Select Committee on Trade and Industry—which has, I understand, asked for transcripts from his Department and from BMW of those telephone calls.

Will the right hon. Gentleman comment on remarks made on the "Today" programme this morning? Dr. Garel Rhys of Cardiff university—an authority on the car industry in this country, as the Secretary of State will know only too well—said: You can't share a confidence with this Administration as it leaks. If the right hon. Gentleman's claim that he was deliberately kept in the dark is accurate, does he think the reason for that is because business does not trust this Administration or this Secretary of State? They have lost the confidence of business, and the workers at Longbridge will pay the price.

Mr. Byers

There has been no suggestion from Conservative Members about how we can provide assistance and support to those workers affected by BMW's decisions. That is a matter of great regret.

Many businesses share confidences with the Government—without leaks. We deal with market-sensitive information daily. When I have the chance to make the matter clear, in an hour and a half session before the Select Committee, the record will show that, unlike the claim made by the Leader of the Opposition yesterday, Professor Milberg did not say: We may have to reconsider our whole investment in Britain altogether.—[Official Report, 29 March 2000; Vol. 347, c. 333.] There was no telephone conversation on 20 December, so I hope that the Leader of the Opposition will withdraw the comments he made yesterday. They were inaccurate and untrue. We must move forward to put the interests of the work force at Longbridge first. That is what the Government intend to do.