Rover Group (Hansard, 21 July 1988)

§ Mr. Nellist
To ask the Chancellor of the Duchy of Lancaster on what date he was first told of Rover's intention to reduce the work force at Cowley and Llanelli; whether that information is contained in the 1988 corporate plan; and whether he will now place a copy of that plan in the Library.

§ Mr. Kenneth Clarke
I was aware before the opening of negotiations with British Aerospace for the Government's shareholding in Rover Group that there was a prospect of work force and capacity reductions at Cowley and Llanelli. Details of Rover's plans for industrial facilities have always been treated as commercially confidential. I do not intend to place a copy of the 1988 plan in the Library of the House.

§ Mr. Teddy Taylor
To ask the Chancellor of the Duchy of Lancaster if he will make a statement setting out the nature and extent of the controls available to the EEC Commission over the future plans for Rover Group in consequence of the recent discussions in Brussels.

Mr. Kenneth Clark
The Commission will monitor the implementation of the Rover Group corporate plan on the basis of half-yearly reports on Rover Group's performance provided by the Government. The Commission's interest in the corporate plan is limited to considering whether under certain circumstances, there should be any repayment of state aid as provided by article 93(2) of the treaty of Rome.

§ Mr. Teddy Taylor
To ask the Chancellor of the Duchy of Lancaster if the permission of the EEC Commission will be required, in terms of the recent agreement, if British Aerospace adjusts its corporate plan for the Rover Group to increase capacity; and if he will make a statement.

§ Mr. Kenneth Clarke
The Commission's interest in the corporate plan is limited to considering whether under certain circumstances, there should be any repayment of state aid as provided by article 93(2) of the treaty of Rome. A condition of the Commission's approval for the cash injection into Rover Group was that British Aerospace should follow the investment and restructuring envisaged in the Rover Group management's existing plans for the period 1988 to 1992. In the case of significant departure from those plans it would, as a first step, raise the matter with the Government, in accordance with its established practice, and seek clarification as to the justification for the changes in the light of circumstances at the time.

§ Mr. Teddy Taylor
To ask the Chancellor of the Duchy of Lancaster if the aid provided to British Aerospace to purchase the Rover Group was conditional on the capacity reductions in the corporate plan; and if he will make a statement.

§ Mr. Kenneth Clarke
A condition of the Commission's approval for the cash injection into Rover Group was that British Aerospace should follow the investment and restructuring envisaged in the Rover Group management's existing plans for the period 1988 to 1922.

§ Mr. Teddy Taylor
To ask the Chancellor of the Duchy of Lancaster if Commissioner Sutherland required capacity reductions at Rover Group before agreeing to the aid given to British Aerospace; and if he will make a statement.
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§ Mr. Kenneth Clarke
The EC Commission regard excess capacity in the European vehicle industry as a sensitive matter. The Commission therefore take account of prospective restructuring of a company's facilities when considering cases of proposed state aid to that company. The Government notified to the EC Commission the restructuring of capacity in component manufacturing and vehicle assembly which the Rover Group had undertaken in recent years, and the existing plans of the Rover Group's management for investment and restructuring in the period 1988–1992. On the basis of this information, the Commission decided that the aid proposed was compatible with the Common Market.