The Motor Industry: Financial Support (Hansard, 6 March 1986)

§ The Duke of Portland
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)
My Lords, the United Kingdom motor industry has received very substantial financial assistance from Government in the past 20 years. Aggregate figures are not readily available because the statistical records for some of the assistance schemes do not identify specifically what has been paid to the motor industry. However, since 1979 the Government have provided the United Kingdom industry with financial assistance of the order of £1¾ billion (including British Leyland).

§ The Duke of Portland
My Lords, will the Minister kindly say what benefit has been derived from this expenditure other than supporting British Leyland?

§ Lord Lucas of Chilworth
My Lords, I do not think that one should lose sight of the fact that £2.2 billion and £1.5 billion of guarantees has gone to British Leyland. In addition, £10 million has been provided, for example, for the development and marketing of electric commercial vehicles and there is a £2½ million programme to help develop a quiet heavy vehicle engine. There are a number of other, but somewhat smaller, amounts that have been made available through a variety of sources to the industry.

Lord Bruce of Donington
My Lords, is the noble Lord aware that the expenditure of some £2 billion, first of all in rescuing BL from bankruptcy and then on 301 ensuring its continued development, is money very constructively expended and also very cost-effective? Is the noble Lord aware that it has been so constructive that all outside interests other than Her Majesty's Government are interested in developing it? On the cost-effective side, is the noble Lord aware that the money has saved the British taxpayer over £4 billion in terms of unemployment benefit that would otherwise have been paid and also a loss of revenue to the Exchequer?

§ Lord Lucas of Chilworth
My Lords, we have always thought that support for British industry is a proper part of Government function, up to a point; and that point is reached in a number of areas when industry is able to take on board and develop more profitably and more effectively the industries which the Government have helped through subsidy of one kind or another.

§ Lord Molloy
My Lords, does the noble Lord the Minister not agree that there are some aspects of the British motor industry which have been extremely useful to British industry as a whole and, indeed, to British defence? Does he not agree that it was quite correct not to have allowed the famous Rolls-Royce engine to wither on the vine, and that it should have been taken into public ownership if only for its massive contribution not merely to the economy but to this island's defence?

§ Lord Lucas of Chilworth
My Lords, I am glad to note that the noble Lord, Lord Molloy, recognises the great value to employment of the British motor industry. I presume he means the British-based motor manufacturing industry.

§ Lord Somers
My Lords, in view of the present situation, can the noble Lord give some assurance that it will not be necessary to change the letters "UK" to "US"?

§ Lord Lucas of Chilworth
My Lords, I am sorry, but I wonder whether the noble Lord, Lord Somers, would repeat the end of his question as I did not quite catch it.

§ Lord Somers
My Lords, I hope that the letters "UK" in the Question on the Order Paper will not have to be altered to "US".

§ Lord Lucas of Chilworth
My Lords, Government support for the United Kingdom motor industry would go on and, indeed, it has, because we have, for example, provided an amount of support money for the Ford Motor Company's engine plant in South Wales and also for General Motors' diesel engine production in the United Kingdom. We have provided £11 million-worth of support through the regional support system for Nissan at its new plant at Washington.

§ Lord Hatch of Lusby
My Lords, can the noble Lord tell the House how the figures that he has given for support from the Government for British car manufacturing compares with that of our major competitors, such as France and Italy?

§ Lord Lucas of Chilworth
My Lords, I regret that I cannot give the noble Lord, Lord Hatch of Lusby, that information, because we are not able to gather from foreign countries accurate figures which would make any comparision worthwhile.

§ Lord Stoddart of Swindon
My Lords, is it not a fact that BL supports hundreds of thousands of jobs, apart from the 80,000 jobs which it provides directly? Is it not also a fact that BL contributes £3,000 million to our balance of payments, in that if we did not have BL we should have to import 500,000 extra cars?

§ Lord Lucas of Chilworth
My Lords, I do not think that the last set of figures is necessarily correct. However, I could agree with the noble Lord that British Leyland, together with the Ford Motor Company, General Motors and all the other companies that produce motor vehicles in this country and export them make significant contributions to the economy of the country.

§ Lord Mellish
My Lords, can the Minister explain to me the logic of the argument that unless the industry remains British it will somehow be bad for Britain, when in fact in the motor car industry in this country we have Ford (which is American-owned, lock, stock and barrel) which employs thousands and thousands of British workers and produces thousands and thousands of cars and thus gives an enormous boost to our balance of trade? Is it not an extraordinary argument therefore that somehow, because a company is American-owned, we in Britain lose out on everything? If that is so, what are Ford doing?

§ Lord Lucas of Chilworth
My Lords, I would dearly like to debate that point with the noble Lord. Lord Mellish, but I fear that his question is a little wide of that on the Order Paper. In the last few days I have frequently discussed with noble Lords this general position of inward investment into the British motor industry and thereby the long-term benefits for the industry and those who work in it.