BRITISH LEYLAND: FUTURE OF' MG DIVISION (Hansard, 19 March 1980)

§ The Earl of KINNOULL
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard)
My Lords, in the view of Her Majesty's Government, the future of MG is a matter which can only be determined by British Leyland Limited on commercial grounds. It is not a matter, in our opinion, for the Government.

§ The Earl of KINNOULL
My Lords, while thanking my noble friend for that reply, may I ask whether he is aware that the current MG sales in the United States constitute 55 per cent. of the entire car sales there of British Leyland? Is he also aware of the considerable emotional and practical support for this car; and is he further aware that to many people it seems a defeatist twist by British Leyland to propose to close down this factory in order to assemble Japanese 210 cars? Can my noble friend give an assurance that he has conveyed to the British Leyland management the very strong feelings expressed in another place a few weeks ago; that the Government share the concern over the loss of possibly 500 jobs; and that, even within the practicalities of the commercial aspect, the Government will keep a very close watch on the present negotiations going on between British Leyland and a private company?

§ Viscount TRENCHARD
My Lords, my noble friend has asked at least five supplementary questions. We are aware of the sales position in the United States. I think that everyone in the House and outside it is aware of the emotion—not least engendered by the fact that many of us in the past have had one of those marvellous MGs. The emotion is well understood. I do not think that my noble friend is right to suggest that the BL plan represents a defeatist twist. This must be a matter for BL's commercial judgment, and the Government must be interested in ensuring that BL have a board which is going to take really sound commercial decisions including, in the area of rationalisation, substantially more than one interest in sports cars. Overall, we must be concerned, while we regret the loss of jobs, in their producing a plan which will reduce the losses—which I am informed include losses in the MG division—and which will turn BL into a viable and profitable concern.

§ The Earl of KINNOULL
My Lords, while accepting my noble friend's reply and his mild rebuke for having put five supplementary questions, could he give an assurance that the Government have passed on to BL management the very strong feelings that were expressed in another place on this issue?

§ Viscount TRENCHARD
My Lords, British Leyland are well aware of the pressure in all areas, in the other place, in this House and among the public.

§ Lord SHINWELL
My Lords, may I ask the noble Viscount, who seems very adequately versed in these matters, why he maintains that this is not a matter for the Government? What is the philosophic, economic, ethical, artistic or aesthetic basis for that declaration? Or 211 am I to assume that there is a political basis and, if so, why not be frank about it and let us know where the Government stand?

§ Viscount TRENCHARD
My Lords, I hope I can answer the noble Lord, Lord Shinwell, clearly. The Government stand as shareholders to British Leyland. The normal interest of shareholders is to ensure that the company is well run and commercially run, has an adequate board and, particularly, a first-class chairman. The Government believe that those conditions exist, but they do not believe that a shareholder's function includes going into detail of the rationalisation of different products in the same field. We believe that to be the duty of managements and not of shareholders.

Lord LEATH ERLAND
My Lords, is it not a duty of the shareholders to nag the management when it is necessary to do so? Also, is it not a fact that British Leyland are making a loss of £145 million this year?

§ Viscount TRENCHARD
My Lords, the figures have recently been announced by Sir Michael Edwardes and I think that is a separate question. Yes, it is indeed the duty of shareholders to nag the management of companies, and we are nagging; we are nagging that they should become commercially sound as soon as possible and get their reorganisation plans completed.

§ Lord UNDERHILL
My Lords, may I ask whether the noble Viscount would agree that commercial management is not always wise and that interest and encouragement by the Government may avoid a repetition of management failure which lost us the motor cycle industry?

Lord BRUCE of DONINGTON
My Lords, are we to infer from the noble Viscount's reply that the Government will be extremely vocal at the next annual general meeting of British Leyland?

§ Viscount TRENCHARD
My Lords, in the case of a nationalised industry, the shareholders have plenty of opportunities for nagging, and I assure you that they use them.