Rover Group Disposal (Hansard, 13 December 1989)

§ The Minister of State, Department of Trade and Industry (Lord Trefgarne)
My Lords, discussions are taking place between officials of the DTI and the European Commission, but no conclusions have yet been reached.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that Answer. However, as time has moved on, is it not quite apparent that this sweetener which was given to the group could in fact be only one sweetener in a basket of many? Can the noble Lord tell us whether other sweeteners were offered and taken up? If that is so, why was your Lordships' House not told about this on previous occasions when the matter was raised?

§ Lord Trefgarne
My Lords, I can assure the noble Lord that we have been scrupulous in observing the proprieties and have made the necessary disclosures through the Estimates and other reporting procedures.

§ Lord Harmar-Nicholls
My Lords, before probing the matter in this House, should we not wait for the report of the official committee which was set up in another place which has the power to get to all of the facts? We would then be probing on the facts and not on guesswork.

§ Lord Trefgarne
My Lords, I have some sympathy with the point just made by my noble friend. However, it is not for me to set down the Questions on the Order Paper.

§ Lord Williams of Elvel
My Lords, were not the two original Statements of 13th and 14th July 1988 made in this House? Therefore, is there not a burden on this Chamber to ensure that these Statements 1298 were not in any way misleading? Further, would it not be true to say that this case would not be re-opened by the Commission if the Commission had given its full approval to the terms of the deal at the time it was struck? If the Commission had done so, there would be no question of re-opening the matter as regards the conditions of the transaction.
Moreover, is it not the case that on 13th July 1988 the then Secretary of State announced that the European Commission had that morning decided the outline terms upon which it would be willing to close its state aid procedure? He then went further on the following day and said: As I informed the House yesterday, the Commission has approved the final terms of the acquisition after certain changes in the structure and scale of the March agreement".—[Official Report, 14/7/88; col. 981.] How could the Commission approve the final terms if it did not know them? Further, if the Commission did not know them—as has recently been revealed—was that statement true, misleading or false?

§ Lord Trefgarne
My Lords, perhaps may answer just two of those supplementary questions put to me by the noble Lord. He raised first the point about reporting to Parliamenent. Detailed financial matters are always reported to Parliament through the medium of Estimates; and, as the noble Lord will be aware, these are not normally laid in this House.
To turn to the question about the European Commission, we had reached agreement with the Commission when these additional items became necessary. We took the view that they were consistent with the Commission's terms as they did not affect the competitiveness of Rover Group production and therefore disclosures were not necessary. Any question of re-opening the procedure would have jeopardised the deal.
That last point is rather important. I should remind your Lordships that the Rover Group had lost some £3,000 million in the period leading up to the deal being concluded by my noble friend. Moreover, the group was in prospect of having to make a further £1,000 million or £2,000 million of investment which it did not remotely have. Therefore, I am certain that the Government at the time, in the form of my noble friend, were quite right to see to it that the Rover Group passed into the private sector.

§ Lord Young of Graffham
My Lords, would my noble friend not agree that the department which I had the honour to head during this particular time demonstrated a commitment to 1992 and to the European Community which is unmatched by any other department or by any other government within the European Community? Will he further agree that as part of my responsibilities as Secretary of State I had to take into account not only the claims of Brussels but also the claims of 40,000 people who worked for Rover, and their families; the 50,000 people who work for the distributors, and their families; and the many tens of thousands of people who work for the suppliers of Rover?
1299 Moreover, will my noble friend also agree that over the years of this decade we have done more to remove the causes of unemployment in this country than any other government in the past?

§ Lord Trefgarne
My Lords, I readily pay tribute to my noble friend's enthusiasm for these matters when he was Secretary of State for Trade and Industry. Indeed, since I joined the department in a more junior capacity I have been running hard to keep up with him.

§ Lord Barnett
My Lords, can the Minister explain why further payments would have jeopardised the deal if these had nothing to do with the deal because it had already been settled?

§ Lord Trefgarne
My Lords, had the matter been re-opened with the European Commission, I have no doubt that it would have taken some time to conclude further discussions. The fact of the matter is that British Aerospace was highly dubious about entering into the deal. I have a feeling—indeed, I think that it was the view at the time, and it was the right one—that the company would have walked away.

§ Lord Williams of Elvel
My Lords, I must repeat my question: on what basis was it stated that the Commission had approved the final terms of the acquisition?

§ Lord Trefgarne
My Lords, the Commission had concluded the application made at that time by my noble friend's department. It had agreed the outline of the arrangements which were in place. The details which were subsequently discussed did not affect the outline.

§ Lord Hatch of Lusby
My Lords, is there not a much deeper principle involved here? According to the published correspondence between the chairman of British Aerospace and the Secretary of State, there was a deliberate attempt to withhold information and thereby deceive Parliament.

§ Lord Trefgarne
My Lords, I am afraid I must tell the noble Lord that that is quite incorrect; there was never any question of misleading Parliament.

Noble Lords
Withdraw!

§ Lord Hatch of Lusby
My Lords, if that is the case, why was it that in the correspondence offers were made as to different methods of withholding this information from Parliament? There was a time when deceiving Parliament was a cause for resignation. Therefore, has parliamentary and political morality sunk so low in the past 25 years that this is no longer the case?

§ Lord Trefgarne
My Lords, I do not believe that the noble Lord has studied with his usual care the correspondence to which he refers. However, if he does so he will find that he is mistaken.

§ Lord Hailsham of Saint Marylebone
My Lords, perhaps I may appeal to the Leader of the House in this matter. Am I not right in thinking that if biting and offensive remarks are made it is in order to move that the Standing Order relating to such remarks be read by the Clerk?

§ The Lord Privy Seal (Lord Belstead)
My Lords, I believe that my noble and learned friend is right, but on this occasion we should do well to move on to the next business.