§ Mr. Hockingasked the Chancellor of the Exchequer whether Treasury consent has yet been given to the proposed offer by Chrysler Corporation to purchase shares in Rootes Motors Limited; and whether he will now give details of the undertakings given by Chryslers in this connection.
§ Mr. MaudlingConsent has now been given, in the light of a letter I received 343W from Chrysler Corporation the text of which is reproduced below, together with my reply.
Letter of 21st July, 1964, from Mr. I. J. Minett, Group Vice-President, Chrysler Corporation to the Rt. Hon. Reginald Maudling, M.P., Chancellor of the Exchequer.
"In view of the many discussions which have taken place both in public and in private as regards the intentions of Chrysler Corporation (Chrysler) towards Rootes Motors Ltd. (Rootes), Chrysler now wishes to state its position as follows.
So long as Chrysler has any shareholding in Rootes, Chrysler will not initiate any action to impair either the home or overseas operations or the management and direction under the Rootes Board of Rootes as a British company in its relations with the Government, labour, its British shareholders, and the public.
It is possible to envisage circumstances in which Chrysler might wish to acquire a majority holding of voting shares in Rootes in order to protect the substantial investment which it is making and may make in the future in Rootes.
In such circumstances Chrysler would not wish to act against the wishes of the British Government of the day. Accordingly Chrysler undertakes that should circumstances arise in which it wished to take steps to acquire a majority holding of voting shares in Rootes Motors Ltd., neither Chrysler nor any of its subsidiaries would take action either directly or indirectly to this end without consulting with the British Government nor over their objection. Chrysler would appreciate an assurance from you that in considering whether to give their agreement, the British Government would take into account the interests of a prosperous and viable development of the motor car industry in general and of the Rootes business in particular."
Reply dated 28th July from The Rt. Hon. Reginald Maudling, M.P., to Mr. I. J. Minett.
"I have received your letter of 21st July in which you set out certain considerations relevant to your application for consent under the Exchange Control Act, to certain transactions envisaged in your Agreement with Rootes Motors Ltd.
I accept that circumstances could arise in the future in which Chrysler might wish to acquire a majority holding of voting shares in Rootes in order to protect their investment. I welcome the undertaking you give that you will not take any steps towards the acquisition of such a majority holding against the wishes of the British Government. On this understanding I am very ready to give you an assurance on behalf of the Government that in considering whether to give their agreement they will take into account the interests of a prosperous and viable development of the motor car industry in general and of the Rootes business in particular.
Finally, I should like to make it clear that there has been no change in our policy of welcoming foreign investment here which is of benefit to our economy; we certainly do 344W not hold that there is in principle and in all circumstances an objection to the acquisition by a group such as yours of a majority interest in a British industrial enterprise.
In the light of this exchange of letters I have now issued instructions for the preparation of the necessary exchange control consents."