Leyland Vehicles Ltd.

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 6th June 1984.

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Photo of Gavin Strang Gavin Strang , Edinburgh East 12:00 am, 6th June 1984

asked the Secretary of State for Trade and Industry what consideration he has given to the corporate plan prepared by Leyland Vehicles Ltd; and if he will make a statement on future Government support for the company.

Photo of Mr Richard Holt Mr Richard Holt , Langbaurgh

asked the Secretary of State for Trade and Industry whether he has received the British Leyland corporate plan: and if he will make a statement.

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

I announced our decisions on BL's corporate plan to the House on 22 May, and they were further debated on 24 May.

Photo of Gavin Strang Gavin Strang , Edinburgh East

Does the right hon. Gentleman accept that unemployment in Bathgate is such that workers who lose their jobs have virtually no hope of finding alternative work? Will he recognise that that is why the social costs of closure are utterly unacceptable? That is also why the finacial costs of closure to the Government are greater than keeping the factory open. If the Secretary of State does nothing else this afternoon, will he tell the House whether the Government have estimated the financial costs of closure of the Leyland plant at Bathgate, and if so will he make the estimates available to the House?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

Of course we make estimates of such things, but to a large extent they include commercially confidential information. If the hon. Gentleman wishes to examine the costs, I commend to him the evidence taken from Lord Stokes by the Trade and Industry Sub-Committee of the Public Expenditure Committee on 16 June 1971. Lord Stokes said that the cost of having the factory in Scotland was equivalent to a 7·5 per cent. tariff. The hon. Gentleman must consider what that cost means in terms of jobs to other workers in other parts of the economy.

Photo of Mr Anthony Beaumont-Dark Mr Anthony Beaumont-Dark , Birmingham, Selly Oak

Does my right hon. Friend agree that, just as BL is coming out of the period when it was known as a music-hall joke, it is depressing, now that its business is improving, to find an increase in disputes such as the present one? Would not this be the time to warn BL workers that the patience of the taxpayers who wish to support the company is not inexhaustable and that the time has come to work, not to strike?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

It would not be right for me to comment on any particular dispute, but it is certain—as has been proved time and time again—that strikes do not save jobs, they destroy them. A long strike purporting to save the job of one individual would no doubt cost the jobs of many others.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

For heavens sake, why are the social costs of any closure at Bathgate commercially confidential? I wish to ask a question of which I gave notice to the Minister of State's office. Can Charles Nickerson be assured that if. his bid is viable he will receive terms as favourable as are being offered to Nissan? Why should an indigenous motor industry employer receive less favourable terms than those on offer to the Japanese?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

First, I said that some of the information was commercially confidential. That includes some of the savings or the costs which would otherwise be caused within BL, according to which option one took up as to which of the factories in the Leyland Vehicles group should be closed. The social costs would be almost infinitely variable according to the assumptions which right hon. and hon. Gentlemen like to make about the future of the Scottish economy and many other things. With regard to the hon. Gentleman's question about the help given to Nissan, he will be aware that different regimes of assistance are available for those projects which are internationally mobile and those which are not. The scale of help or assistance for domestic United Kingdom projects——

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

I am sorry, the right hon. Gentleman cannot say that. Well, he can say it, but it does not happen to be true. The scale of help within the United Kingdom is, of course—[Interruption.] I wish that the right hon. Gentleman would shut up for a moment. Mr. Speaker? It is impossible, when one is trying to treat the question of the hon. Member for Linlithgow (Mr. Dalyell) seriously, to be subjected to perpetual barracking from a former Minister who ought to know a damned sight better. I am afraid that I shall have to start again. That will cut out a number of hon. Gentlemens' questions.

In the event of Mr. Marshall or anyone else coming forward with a proposition to take over all or any part of Bathgate, it would be studied to see to what extent we could financially assist, taking into account its prospects of commercial success, and I should be happy to do that.

Photo of Mr Kenneth Carlisle Mr Kenneth Carlisle , Lincoln

If the taxpayer is to subsidise BL, is it not right that it should purchase a substantial proportion of its components in this country? There are increasing signs that it is not doing that as much as it did in the past. Will the Government ask for a review of the matter?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

I hope that British Leyland will continue to buy the great majority of components within the United Kingdom. If my hon. Friend's concern is for the taxpayer, he will assuredly want BL to buy in the most competitive market, because if it does not it will not sell its motor cars.

Photo of Mr Michael Meadowcroft Mr Michael Meadowcroft , Leeds West

Will the Secretary of State accept that necessary Government support for British Leyland has to extend beyond his Department, and that the loss of 440 jobs at Charles H. Roe at Leeds is a direct result of the reduction in the transport supplementary grant and the phasing out of bus grants? Will he therefore speak to his right hon. Friend the Secretary of State for the Environment to see that rate levels and rate-capping do not prevent orders being given for at least 100 buses a year, which are all that are required to save that plant?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

The hon. Gentleman is completely wrong. It is not the level of transport supplementary grant that has caused the decline in orders for buses. The hon. Gentleman must try to examine the matter in a rational light. One thing that has caused the fall-away is that after a burst of ordering in pursuit of introducing one-man buses the demand is now at a lower level. Another cause is that people in some cases prefer to travel by a means of transport other than buses. A third cause is that sometimes bus companies are not run effectively. I am sure the hon. Gentleman takes great heart from the number of bus companies that are now competing successfully with British Rail. No doubt he will give no help at all to those who want subsidies for British Rail as well.

Photo of Mr Bill Walker Mr Bill Walker , North Tayside

Can one take it from my right hon. Friend's earlier reply about Bathgate, that the Government are pursuing actively the search for alternative owners for that factory? Can he confirm that in the past in Scotland organisations and companies which were in public ownership and were not able to compete effectively were subsequently taken over by the private sector and that the 7·5 per cent. penalty did not seem to deter them from being successful?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

My hon. Friend is right. In many cases it depends upon where the market for the product is. Perhaps he had most in mind the remarkable case of Scott Lithgow where, despite the jeers and derision of right hon. and hon. Members of the Opposition, the private sector came in and rescued a company which had been bankrupted by nationalisation.

Photo of Mr Derek Fatchett Mr Derek Fatchett , Leeds Central

I am delighted to have the opportunity of following the hon. Member for Leeds, West (Mr. Meadowcroft) who, like all the Liberals, after taking no interest in this issue, suddenly appears to have an interest in it. In reply to his question the Secretary of State said that there was no relationship between the cut in transport subsidy and the loss of orders for the bus industry. Is the Secretary of State not aware that British Leyland management attributes the loss of jobs in Leeds directly to Government policy and that all those who know the bus and coach industry realise that Government policy in cutting transport subsidies and also in relation to the 3·5 million unemployed put jobs in jeopardy not just in Leeds, but in the coach and bus industry elsewhere? In those circumstances, will the Secretary of State give a commitment to meet his colleague the Secretary of State for Transport—I realise that for both of them this will be a challenging prospect—to discuss the subsidy for the industry and measures to save the jobs in Leeds, which are crucial to our city, and which receive so little interest from the Secretary of State?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

I hope the hon. Gentleman will forgive me if I do not indulge in the Punch and Judy, ding-dong, two-party game that goes on. I am very glad to hear that he believes everything that the BL management says. I hope he will be able to convince some of his right hon. and hon. Friends that they, too, should believe BL management. The level of subsidy is entirely adequate in the view of my right hon. Friend the Secretary of State for Transport and myself. Therefore, there is no cause for us to discuss the matter.

Photo of Edward Leigh Edward Leigh , Gainsborough and Horncastle

Has my right hon. Friend noticed that Track Marshall of Gainsborough is interested in buying the engine plant at Bathgate? Will he look at that application with favour and reject the intemperate remark of the hon. Member for Linlithgow (Mr. Dalyell) last week, when he said that the original tractor line was "bloody well stolen"?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

The application by Marshall's is not to my Department or to me, but to British Leyland. It is a commercial matter between the two parties. However, requests for regional aid or anything of that kind will be examined by my Department with every sympathy. We should like employment to continue at Bathgate at the highest possible levels.

My hon. Friend mentioned the hon. Member for Linlithgow (Mr. Dalyell) and the original tractor line. The best thing that we can do is to cease to throw bricks at each other and see how best we can help the factory to survive under new ownership, if that is possible.

Photo of Geoffrey Robinson Geoffrey Robinson Shadow Spokesperson (Trade and Industry)

May I refer to the sale of Jaguar Cars? Bearing in mind the Secretary of State's sincere commitment to the maximum participation by employees in the businesses in which they work—and without disrespect to the chairman of Jaguar Cars—will the Secretary of State consider making financial advice available to the management and employees on the form, extent and terms of the equity participation that they might have in that company?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

I am sure that the management and work force are capable of taking their own advice.

Photo of Mr Barry Henderson Mr Barry Henderson , North East Fife

Is my right hon. Friend aware that, despite the long list of companies which have moved to Livingston in recent years, and which are likely to deliver more than 4,000 jobs, there is great anxiety about unemployment in central Scotland? Is he aware that that is combined with a nagging anxiety that British Leyland's top management, located as it is south of the border, may not have given fair dos to the Bathgate plant when comparing facilities? Can he reassure the Scottish people that rational decisions have been taken and that parochial prejudice is not involved?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

I can assure my hon. Friend that the question of the border is utterly and completely irrelevant to the matters discussed. Indeed, I have to remind some Opposition Members that the plant is within the United Kingdom, as are other BL plants.

Photo of Mr Peter Shore Mr Peter Shore , Bethnal Green and Stepney

The Secretary of State did not answer the relevant questions about the future of Bathgate posed by my hon. Friend the Member for Linlithgow (Mr. Dalyell), nor did he answer the interjections by my right hon. Friend the Member for Swansea, West (Mr. Williams) from the Opposition Front Bench. For the record, may we have answers to some specific questions? Is there, or is there not, a differential between companies from overseas investing in British development areas and British companies investing in the same areas? If there is such a difference in incentive, what is it and what is the justification for treating Japanese and other foreign companies more favourably than British firms?

Photo of Mr Norman Tebbit Mr Norman Tebbit , Chingford

I hope that the right hon. Gentleman will not allow his xenophobia to get in the way of the national interest. Of course there is a justification for offering particularly attractive terms to bring to the country internationally mobile projects which otherwise might go to another part of the European Community and have free access to our markets, but would not provide any jobs in this kingdom.

Later

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

On a point of order, Mr. Speaker. It arises from question No. 7 asked by my hon. Friend the Member for Edinburgh, East (Mr. Strang). A slip of the tongue was made by the Secretary of State, but I make no complaint about that. For the sake of clarity, it is important to make this point in a delicate situation. The right hon. Gentleman referred to Mr. Charles Marshall. In fact, it is Mr. Charles Nickerson of Track Marshall who has made the serious bid for an interest in the Bathgate factory.

The hon. Member for Gainsborough and Horncastle (Mr. Leigh) referred to an infelicitous phrase that I used. Perhaps it was infelicitous, and for that I apologise to the House. My expression referred not to Mr. Nickerson, but to a different man. Over the years, Lothian ratepayers have paid a great deal of money from their resources into the tractor line that had to leave Bathgate. I was simply reacting on behalf of my constituents to the use money which they paid as ratepayers.

While the Leader of the House is here——

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. The hon. Gentleman has corrected the record. He must now raise his point of order with me.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

The Secretary of State for Trade and Industry put forward a new doctrine in relation to the differential between British companies and "internationally mobile" companies. As it is such a new doctrine, may I ask the Leader of the House, through you, Mr. Speaker, for a statement clarifying the new doctrine for grants to Japanese and other foreign firms?