§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)My Lords, with the leave of the House, I should now like to repeat a Statement that has been made by my right honourable friend the Secretary of State for Trade and Industry in another place concerning British Leyland. The Statement is as follows:
"With your permission, Mr. Speaker, I should like to make a Statement.
"When I made my Statement to the House on 25th March following the end of the talks between British Leyland and General Motors on the privatisation of the main Land Rover-Leyland businesses, I made it clear that British Leyland would continue to study alternative ways forward for all the businesses concerned. In the particular case of Land Rover and Freight Rover, British Leyland asked for proposals to be made by 15th April. As the House is aware, four proposals were received. These were from Aveling Barford in respect of Land Rover and Range Rover; J. C. Bamford in respect of Land Rover, Range Rover and possibly Freight Rover; Lonrho in respect of Land Rover and Range Rover; and Schroders, acting for a management and institutional consortium, for Land Rover, Range Rover and Freight Rover.
"The British Leyland board has carefully considered these proposals and has weighed them against the option of retaining Land Rover and Freight Rover within British Leyland for a possible flotation or trade sale at a later date. The board has concluded, on both commercial and industrial grounds, that retention of the businesses within British Leyland pending a later sale presents a more attractive option for British Leyland than any of the bids which have been received. The board has therefore recommended to the Government that none of the bids be pursued and that the companies be retained within British Leyland while preparations for future privatisation are made. The Government have accepted the board's recommendation."
My Lords, that concludes the Statement.
Lord Bruce of DoningtonMy Lords, we on this side are grateful to the noble Lord for having repeated the Statement made in another place. We should also like to extend our sympathy to him for having to announce such a humiliating decision by the Government. We do not propose to detain the House for long in view of the important business that we have on hand. We shall therefore refrain from rubbing the Governments nose further into the mess that they have created. All we would note for the time being is that this belated decision has cost the industry thousands in terms of uncertainty in the minds of staff and customers. This decision is long overdue. Will the Government give an undertaking to keep their nose, in future, out of the business of British Leyland?
§ Lord DiamondMy Lords, I, too, thank the Minister for repeating the Statement, but it does not explain in any substantial way why there has been this change of ground. Why did the company, and the Government behind the company, start negotiations to sell something and then decide that they were not going to sell? Would it not have been simpler not to have started upon this? Would that not have saved the anxiety that has been referred to and a lot of uncertainty? Would it not have saved employees the anxiety of not knowing what was happening to them? Why have the Government suddenly decided that what they wanted to do a short time ago they no longer want to do? Is it because the bids were unattractive in size, or is it because the Government have returned to their senses? We hope that it is the latter.
§ Lord Lucas of ChilworthMy Lords, I have to acknowledge the response of the noble Lord, Lord Bruce of Donington, to the Statement that I have just made. But his response raised no questions for me to answer. The noble Lord, Lord Diamond asked me a question: why have we entered into negotiations that have now been abandoned? The reason, as I have oft repeated in your Lordships' House, is that it is the Government's intention to return British Leyland to the private sector because we believe that the company and its subsidiary companies would be better able to function in the private sector. That we still believe. It has been our intention in pursuing that aim to ensure long-term future viability, particularly of the truck industry to which Land Rover and Range Rover were attached at the outset. Unless some rationalisation takes place, we believed at that time, and believe today, that that future is in some jeopardy.
That the negotiations broke down, as I repeated to your Lordships in a Statement on 25th March, was unfortunate. It was beholden upon the board of British Leyland, however, to pursue the inquiries that were then on the table. That has been done. The British Leyland board has concluded that none of those bids is in the long-term industrial or commercial interests of the company. It has rejected the bids. It has advised Her Majesty's Government of its view, and Her Majesty's Government have concurred with it.
§ Lord Bruce-GardyneMy Lords, can my noble friend tell the House what there is in the record and performance of British Leyland's management of this business in the past to lead one to expect that it is likely to make a better fist of managing this business than any of those who are bidding to take it over?
§ Lord Lucas of ChilworthMy Lords, I say this within the context of the Statement—that is, Land Rover and Range Rover. There is no doubt that the management, through their rationalisation of assembly plants into one establishment (that of Solihull), the past year's improvement in profitability, which was marginally better than the previous year and which brought that subsidiary company from loss to profit, and the plans for wider international distribution of the product, which is gaining a more favourable acceptance, give us reason to suppose that the company may very well prosper. We have faith in the company in pursuing their policies. That will 1316 enable us to secure the aim, to which I have earlier referred, at a later date.
§ Lord BarnettMy Lords, if the management is that good, why did not the Government agree to the management buy-out?
§ Lord Lucas of ChilworthMy Lords, because the management buy-out, the conditions attached, and so on and so forth, when set against the option of leaving the company within British Leyland for a future date were not considered as attractive.
§ Lord Lloyd of KilgerranMy Lords, in order to reduce the suspense and anguish to members of British Leyland and their customers, is the Minister able to say how long it will be before the preparations for future privatisations—mentioned at the end of the Statement—will take place? Has he any idea? Is the Minister aware whether the trade unions were consulted in deciding not to proceed with these various attempts to modify the position?
§ Lord Lucas of ChilworthMy Lords, I do not wish to be pedantic but when the noble Lord, Lord Lloyd of Kilgerran, refers to British Leyland we are talking about only one aspect of British Leyland: that of Land Rover-Freight Rover. So far as the timing is concerned it is, frankly, very difficult to tell when a more propitious moment may arrive. We would seek to identify that moment in concert with the British Leyland board and then pursue the objective which I have described. With regard to trade union consultation, my honourable friend the Minister for Industry, and my right honourable friend the Secretary of State, have received every delegation from the trade unions who have asked for consultation. Indeed, my right honourable friend the Secretary of State has made himself available to Mr. Todd who has declined to accept the invitation to discuss these matters with him.