HL Deb 30 June 1999 vol 603 cc278-80

3.7 p.m.

Lord Brougham and Vaux asked Her Majesty's Government:

What talks they have had with Karel van Miert, the European Union Competition Commissioner, regarding the aid package to BMW for the Rover Car Company.

Lord McIntosh of Haringey

My Lords, the UK met with the European Commission on 11th May to discuss the package of support for Rover's Longbridge plant. This was the first of a series of meetings which are expected to take place. The UK will shortly be lodging its formal notification of the aid package with the European Commission.

Lord Brougham and Vaux

My Lords, I thank the Minister for that Answer, as far as it goes. However, if the Government failed to convince Herr Miert and as his approval is necessary, can the Minister say when they intend to meet him again? Is it not unfair to the workers of Longbridge that they have been led to believe that all is well and doubts are now cast on the future of the rescue package?

Lord McIntosh of Haringey

My Lords, the words which Commissioner van Miert used were that he, "remains to be convinced" of the mobility aspect of the aid package; in other words, whether there was a realistic alternative to Longhridge for the development of the R30 car. Mr. van Miert has expressed comparable opinions on many occasions. We are confident that at the end of the negotiations we will show that in all respects, as we anticipated, the aid package is in conformity with the EU framework. A series of meetings to which I referred in my first Answer will start on 7th July.

Lord Mackay of Ardbrecknish

My Lords, would it not have been far better if Her Majesty's Government had made certain that the Competitions Commissioner was content with the package before it was announced? Are not the Government ashamed at the terms of the press release issued by the Commission when it said: The UK Government gave ample coverage yesterday [last week] to its formal agreement with BMW over an aid package to Rover's Longbridge factory. It should be quite clear that the UK Government must notify the aid to the Commission and indeed withhold any payment until the Commission has formally approved the proposal"? Is not that a fairly stiff reprimand? Is it perhaps the reason why neither of the two Ministers who look after the DTI in your Lordships' House have come along today? Will not the Government do this kind of thing the next time, and, before they trumpet aid, clear it with the Commission?

Lord McIntosh of Haringey

My Lords, the noble Lord knows as well as I do that aid packages of this kind are always subject ultimately to the European Commission. It has always been the case that they have been announced before the final negotiations are complete, always under his government as well as under this Government. This is no exception to the rule. In those circumstances, there has been no breach of existing procedure. BMW, Rover and the United Kingdom Government always knew from the beginning that ultimately European sanction would be needed. We said so at the time and we say so now. As for my presence at the Dispatch Box, I apologise, as always, to the noble Lord for the inadequacy of my answers.

Lord Clinton-Davis

My Lords, would my noble friend agree that the well known pro-European credentials of the noble Lord who has just asked that question need these days perhaps to be hidden, when one considers the company that he keeps?

Lord McIntosh of Haringey

My Lords, the noble Lord, Lord Mackay of Ardbrecknish, is too fly to allow himself to be caught with the Eurosceptic philosophy of his party. He always asks questions and makes speeches which fail to reveal his own views.

Lord Pearson of Rannoch

My Lords, can the noble Lord the Minister assure the House that these aid packages are dealt with by the Commission in an even-handed way across the whole Community?

Lord McIntosh of Haringey

My Lords, of course they are dealt with in an even-handed way. The framework is well established. It has been set out for many years. I should say to the noble Lord, Lord Pearson, that we are very much in favour of the rigorous application of competition legislation in the European Community. It is enormously to our advantage to see that unjustified state aid is reduced and that genuine competition throughout the European Union is encouraged by this kind of regulation.

Lord Paul

My Lords, I congratulate the Government on the support that they have given to BMW and Rover. It is an essential industry in that part of the country. Will the Minister confirm that the Government will expedite the procedure of the European Commission?

Lord McIntosh of Haringey

My Lords, I am grateful to my noble friend for those congratulations on behalf of the Government. It is, of course, a procedure which takes a number of months. There has to be a thorough investigation by case officers into all the matters that are contained within the framework. We will, of course, be doing our part by submitting our evidence. BMW and Rover will also be doing their part by submitting their evidence in sufficient time to ensure that we reach a satisfactory conclusion, of which a am confident, as early as possible.