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British Leyland

Opposition Day – in the House of Commons at 4:50 pm on 5th February 1986.

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Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East 4:50 pm, 5th February 1986

I have selected the amendment in the name of the Prime Minister. I should like to repeat what I said earlier. There is great pressure to speak in this important debate. May I say to both Front Benchers and Back Benchers that this is a day on which brief contributions will be very much to the benefit of other hon. Members.

Photo of Mr John Smith Mr John Smith , Monklands East 4:58 pm, 5th February 1986

I beg to move, That this House deplores the willingness of the Government to dispose of British Leyland's commercial vehicle enterprises, which will lead to substantial job losses in vehicle construction and motor components manufacturing, the loss of independent British capability in design, research and development and a further damaging reduction in Britain's manufacturing base; and calls upon the Government to abandon forthwith its proposals to sell off Austin Rover Group, the last remaining British owned volume car producer.

Before I embark on what I hope will be a brief contribution, may I, on behalf of the Opposition, express our dismay at the way in which the Government arranged to make two statements on the afternoon when this important debate was to be held. The Government's strategy—I know that it has nothing to do with you, Mr. Speaker; it is entirely a matter for the Government's business managers—is crystal clear. They want to push this debate as far as possible into the afternoon so that it will not be reported in the news bulletins at 5 pm and 6 pm. The Government may be able to obfuscate matters temporarily by these stratagems, but they cannot escape responsibility for what we extracted from the Secretary of State for Trade and Industry last Monday. The right hon. Gentleman was forced to come to the House to confirm the fears that were expressed in Birmingham at the weekend by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley). What the Secretary of State said was sufficiently informative for us to discover that the Government have in mind a plan to sell off Leyland Trucks and Land Rover to General Motors and to dispose of Leyland Bus to the Laird Group. We know that talks are taking place with Ford, and perhaps others, on the future of the Austin Rover Group.

This debate is timely because, now that we have flushed the Government's intentions out of them, Parliament and the country have an opportunity to express their views before these matters are finally decided, although we re told that they are at an advanced stage. The Government have hopelessly miscalculated public opinion c this matter. The representations flooding in from all over the country, especially the west midlands, are ample testimony to that.

I start in the hope that what is said in the debate by hon. Members on both sides of the House will influence Government opinion so that the Government will desist from the course of action on which they have embarked. I begin with Leyland Trucks. It is well known that General Motors has been looking for an acquisition in western Europe. It has been to Spain and West Germany, although it is significant that no one even thinks that it might go to France. The French would never consider such a proposition from General Motors. The company has been rebuffed, or its discussions have not been fruitful, so it has come to the soft touch of western Europe —Britain under this Government.

General Motors' purpose, as with most such multinationals, is to promote its parent company's strategy for gaining a world market share and maximising its long-term profits. As part of that strategy, General Motors may indeed carry out manufacturing in the countries in which it trades—either real manufacturing or assembling. It may even carry out research and development, depending on how it suits the company. Let us never forget, however, that in companies such as General Motors policy will be decided at home—in Detroit, or, in the case of GM world bus and truck division, in Pontiac in Michigan. Most of the profits will flow back to the home of the parent company. Once the company has knocked out or taken over competition, it is free to shift the balance of investment in plant or research towards home or markets elsewhere.

I do not doubt that the proposal makes a great deal of sense for General Motors. First, it will eliminate a significant competitor. Secondly, after GM has knocked out that competitor, it will gain the market share that Leyland Vehicles held. Thirdly—this is an extra bonus —it will obtain access to splendid new plant and equipment which has been provided at public expense at more than £300 million.

It makes sense for General Motors. But what are the consequences for Britain? It is clear that there will be heavy redundancies. In the case of Leyland Vehicles, if the acquisition goes ahead, there will either be rationalisation at the Bedford end or redundancies at the Leyland end. Whatever happens, there will be high unemployment and another addition to the remorselessly rising unemployment total.

When the Government tell us that there has been a new increase in unemployment, almost in tones of puzzlement as to the reasons, they should remember that unemployment increases so relentlessly because of decisions such as this—the relentless closure of plant after plant from one end of this country to the other.

The proposal will result in the elimination of one more important British industrial centre and a further reduction in our manufacturing base, with serious consequences for Britain.

Photo of Eric Forth Eric Forth , Mid Worcestershire

Does the right hon. and learned Gentleman agree that there is some common ground, in the sense that there is a serious overcapacity problem, both in heavy vehicle manufacturing and in private cars, not only in Britain but throughout Europe? Does the right hon. and learned Gentleman therefore agree that, whichever solution is adopted, the problem must be dealt with?

Photo of Mr John Smith Mr John Smith , Monklands East

The hon. Gentleman is right. It is common knowledge that there is an over-capacity in car and bus manufacturing in western Europe. But why, when these matters arise, is it always Britain that has to give up its share of the car market? Why do the Government not learn to compete rather than surrender?

Land Rover is being put into the deal as a sweetener, if you please, to induce GM to take over Leyland Vehicles for a song. No doubt it will be asked to pay some small contribution to acquire Land Rover. Land Rover is one of the United Kingdom's most successful products which is reckoned throughout the world as a triumph for British engineering, marketing and industrial success. That product is to be Americanised. However, last Monday, the Secretary of State for Trade and Industry told us that we do not need to worry too much because special assurances will be given that the British marque will be maintained. We do not need to worry—the products will he owned and sold by GM and the profits will go to America but there will be a token Union Jack on the Land Rovers that are sold around the world to remind people that the product was once British.

It is disgraceful that this important product is dealt with in this way. That was one of the assurances that the Secretary of State gave us, but we have heard other assurances from Ministers at the Dispatch Box. Only a week or two ago, the former Secretary of State, the right hon. and learned Member for Richmond, Yorks (Mr. Brittan), gave us assurances on behalf of Sikorsky-Fiat, saying that the product would be British researched and designed and that there would be an independent British capability and British independent managerial influence. We have had assurance after assurance. Conservative Ministers find themselves continually coming to the Dispatch Box and giving assurances on behalf of American companies. [HON. MEMBERS: "Labour is anti-American."] The feeling in the House is not that the House is anti-American but that the Government are anti-British.

Photo of Mr John Smith Mr John Smith , Monklands East

The hon. Gentleman knows that perfectly well, because he is a keen student of these matters. The bus market has collapsed because of the Government's transport policy. First, we had deregulation, then privatisation and then rate capping —three hammer blows at the bus industry, completely knocking the bottom out of demand for public sector buses. Why do the Government not change their transport policies instead of sacrificing yet another important British company on the altar of their dogmatism?

Once again, there will be an inevitable loss of jobs because, if the Laird Group and Leyland Buses come together, redundancies will occur at either or perhaps both plants. Again, there will be a loss—Britain will have moved out of another important industrial centre.

The problem arises not just in primary manufacturing. All hon. Members who represent seats in the west midlands, the black country and throughout the rest of Britain will know of the crucial importance of the components industry. For every man who stands on a production line in a car plant, there are seven others whose jobs depend on his work. With the shrinking in size of the manufacturing base which these changes imply, the market for components is bound to diminish to a large extent. Perhaps even more importantly, the loss of British control will operate sadly to the detriment of those people. British Leyland buys British —92 per cent. of the components it buys come from British companies. That is British Leyland's settled and firm policy. The component manufacturers are entitled to, and do, rely on that sure market when investing and deciding for their future.

Let us remind ourselves of the experience that this very Government have had with GM. It was only in October 1985 that the Secretary of State's predecessor was reported in the Financial Times under the heading: "UK content in Vauxhall's too low says Brittan." The article reads: In the most critical public remarks yet made on the subject by a minister, Mr. Leon Brittan, Trade and Industry Secretary, told the Commons he regretted that, 'after lengthy discussions Vauxhall is not yet ready to go further in proving that it really is a British car producer.' If that is the position when the company is competing with British firms, what will be the position after it has taken them over?

Photo of Richard Caborn Richard Caborn , Sheffield Central

My right hon. and learned Friend has referred to the components industry, but in the area which I represent about 18 per cent. of the special steels produced in Sheffield goes to British Leyland. There is great concern within the steel industry. It has already been treated unfairly by the Government and run down. Any takeover of the firms in question will have a major impact on the steel industry in the area which I represent.

Photo of Mr John Smith Mr John Smith , Monklands East

I am grateful to my hon. Friend for his intervention. The importance of special steels, especially in the Sheffield area, is well appreciated. However, with respect to my hon. Friend, the importance of the industry extends beyond Sheffield. Strip steel is also involved, and there are many areas in which strip steel production is of great importance.

Photo of Mr James Hill Mr James Hill , Southampton, Test

In speaking on behalf of my constituency and the port of Southampton, I hate to hear General Motors being denigrated. For many years it has operated a successful factory called AC Delco, in Southampton. The factory continues to produce and it employs many of my constituents. The anti-Americanism that is creeping into our debates is beginning to have an effect on the company's future expansion plans. I hope that the right hon. and learned Gentleman will bear that in mind.

Photo of Mr John Smith Mr John Smith , Monklands East

That is a curious definition of anti-Americanism. Are we being anti-American when we object to our own industries being sold out for a song to American multinationals? If that is to be defined as anti-Americanism, I hope that the majority of the House will share the view that I have expressed. I do not seek to denigrate General Motors. I think that the company has acted intelligently in its own interests. I seek to denigrate our negligent Government.

We know from its track record that the assurances of General Motors raise some doubts when we come to consider whether they can be relied upon. All those who are employed in the components industry—

Photo of Mr John Smith Mr John Smith , Monklands East

No, I shall not give way. I have given way frequently already in what is a short debate.

I am sure that many hon. Members on both sides of the House have received letters today from components companies in the west midlands. I shall quote from one which I received. I shall not name the company because I do not have its permission to do so, but —[Interruption.] Very well, I shall name it. I must free myself from the inhibitions arising from my wish to be fair to all concerned. In the interests of Conservative Members, I shall tell them that I received the letter from Concentric plc of Sutton Coldfield. I think that many hon. Members will know that it is an important firm. The author of the letter wrote to me in the knowledge that the debate was to take place, and welcomed the fact. The letter reads: There is no doubt in our minds that should the decision-making process for BL leave these shores, then the future of this group is in dire problems. Not only for the 10%of sales with BL but because the whole manufacturing infrastructure that we require to make all our products will slowly disappear.Our considerable success in overseas markets can only be sustained with a home market base. Our very considerable innovative ability can only be sustained if there is market opportunity.In the particular of course GM and Ford have pursued a policy in recent years that have contributed more than most to our industrial problems here. The final paragraph reads: Whilst we are concerned about work for the unskilled in the short term, we are more concerned for the opportunity for people of vision and innovation to be able to create more work in the future. That is an unsolicited letter from a concerned company, and it goes right to the heart of the matter.

As we are short of time, I shall not go into the important defence considerations which arise. Some of them were referred to yesterday, and I have no doubt that others will refer to them again this evening. These considerations involve Land Rovers through to tank transporters. In future, the British Army will be dependent on a foreign supplier.

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

Will my right hon. and learned Friend—[Interruption.] In this instance we are either all friends together or we are all lost on the motorway. Does the right hon. and learned Gentleman agree that over 90 per cent. of British Leyland's products are made from British components, whereas British components comprise only 68 per cent. of the products of the Ford Motor Company? I do not seek to denigrate Ford but now that it is closing down its forges in this country and transferring forging operations to Germany, British components will comprise only 63 per cent. of its products next year. Why should it treat British Leyland and the British people any better than that?

Photo of Mr John Smith Mr John Smith , Monklands East

The hon. Gentleman is to be congratulated on seeing these issues so clearly and on speaking about them so well. I hope that he will continue to do so. I am sure that he knows—I hope that this is appreciated by Conservative Members generally —that the concern about this matter crosses party divisions and has spread throughout the country. The Government are only just beginning to discover the depth of feeling that exists in non-industrial as well as industrial areas.

I turn, finally, to the proposals for the Austin Rover Group—

Photo of Mr John Smith Mr John Smith , Monklands East

No, I shall not give way. I have given way frequently in this short debate.

Photo of Mr Ernest Armstrong Mr Ernest Armstrong , North West Durham

Order. It is obvious that the right hon. and learned Member for Monklands, East (Mr. Smith) is not giving way. Interventions, especially from those who are waiting to catch my eye, will make it more difficult to call all those who wish to participate in the debate.

Photo of Mr John Smith Mr John Smith , Monklands East

The Secretary of State did not tell us very much about the Austin Rover Group on Monday. However, on television, a few minutes after he left the Chamber, the information was tumbling out of him that the Government had sanctioned talks between Austin Rover and Ford. That must have come as a considerable shock to most of the country.

When the Prime Minister was asked about the matter yesterday, all she had to tell us was that £2 billion had been committed to the British Leyland Group. She kept telling us about the Varley-Marshall guarantees of £1·5 billion. The right hon. Lady knows perfectly well—if she does not, she should—that not a ha'penny has been paid under the Varley-Marshall guarantees. They would be called upon only in the liquidation of the company.

The Prime Minister might have said—[Interruption.] I hope that Conservative Back Benchers who find these matters amusing will remember that not one penny piece has gone from the taxpayer to the Austin Rover Group in the past two years. The Prime Minister did not find time to mention that. Why did she have to tell us about the money that has been invested in British Leyland when asked about these matters without once managing a word of praise for the success story of the Austin Rover Group over the past two-and-a-half years? She demonstrated no pride in the British achievement that turned the Austin Rover Group round to a successful future.

I accept that there was substantial public investment in the group. There should have been and there was. There was a considerable investment of capital and there was also a great sacrifice. Thousands lost their jobs and livelihoods in the remodelling of the group.

Photo of Mr John Smith Mr John Smith , Monklands East

No, I shall not give way to the hon. Gentleman.

The investment and sacrifice will have been made for nothing if they are disregarded at the moment when the results of both are coming to fruition. This is not the time to sell the Austin Rover Group. The notion is gaining currency that the Government are willing to dispose of the group to almost any purchaser, such as Ford, Honda or General Motors. It seems that they would be willing to dispose of it to any company which wishes to take it off the Government's hands, which suggests that they regard it as a terrible liability.

This is the time to support, not sell, the Austin Rover Group. We must support it through to success. If there is a tie-up with Ford, that will smash the strategy that has been devised with Honda. It will mean that the strategy of launching the new Rover 800 —one of the most important of all initiatives —cannot be sustained. If there is a tie-up with Ford, Ford will want to replace Austin Rover's engines with Ford engines. The Austin Rover Group will not be able to maintain its independent capability realistically unless it proceeds on its present course.

Of course, Austin Rover will have to collaborate. All car companies have to collaborate from time to time in the modern world. It must be understood that collaboration is quite different from surrender and capitulation, which is likely to be the result if the current talks continue. That is why we ask in our motion that the talks be ended forthwith. The Government should say quite clearly that there is no point in any discussions taking place. I understand that the executives of the Austin Rover Group are being forced to conduct discussions with Ford. There is no enthusiasm to do so. Indeed, there is outright hostility to the talks among those who manage and run the company. However, they are being forced to conduct negotiations.

The motor car industry is not, as many mistakenly assume, old and dying. It is part of our manufacturing base. It cannot be allowed to be closed down and to disappear. The development of CADCAM and robotics means that the motor car industry is the most important market for the modern elecronics industry. Without markets, industries die. If we eliminate the market that is created by the motor car industry, we shall kill our electronics industry as well. It is an industry in which we must resolve to stay because we will have none of the services if we do 'not have the manufacturing base which provides the market for them and which provides the wealth which sustains our wages and standard of living. Therefore, we must resolve to stay in an industry which, because of those technical changes, will permit us to operate on the scale of the Austin Rover Group without necessarily having to become a world car outlet. The technology allows a medium-sized operation to be sustained successfully.

We have watched with dismay the collapse of one area after another of our manufacturing industry, to the extent that more than 20 per cent. has disappeared since 1979 and more is clearly going. We are watching that decline and also watching a new development—the way in which our industry is passing into the control and ownership of others.

In his book "Back from the Brink", Sir Michael Edwardes, who played a significant part in the fortunes of the Austin Rover Group, sounded a warning which he said both his successors and Ministers might find relevant, although I do not think he ever thought is would come to pass: The dangers of a link with a multinational would be that BL would become no more than an offshore assembly operation—not even the Right wing of the Conservative party would have been sanguine about that outcome. Sir Michael Edwardes has more to fear than the Right wing of the Conservative party. We have reached the shameful situation where the British Government are co-operating in making important British industry an "offshore assembly operation".

The country is shocked at the casual way in which the Government have gone about this matter and the easy way in which they shrug off responsibility. The country is shocked at the easy way in which they talk about anti-Americanism and forget about their obligations to be pro-British, and, above all, the country is shocked at the blind dogmatism which prefers a foreign private sector solution to a British national interest. In this episode three elements of Conservative industrial policy are coming together. It always results in a loss of jobs, it always results in permanent loss of plant and it nearly always results in the loss of British independent control.

The depth of feeling is growing in this country. I think that this will be an angry debate because angry people are calling the Government to account for the responsibility they hold. They are letting British industry not only die but pass into the control of others.

Photo of Mr Paul Channon Mr Paul Channon , Southend West 5:22 pm, 5th February 1986

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'notes with approval the Government's continuing determination to work towards a viable and internationally competitive automotive industry located in the United Kingdom; and endorses the view that, subject to satisfactory terms and conditions, the merger of the commercial vehicle activities of Land Rover, Leyland and Bedford would contribute to that objective and provide the best prospects for secure long-term employment in the industry.'

I agree with the right hon. and learned Member for Monklands, East (Mr. Smith) on one point. The motion deals with an extremely important industry in our country, a central part of our manufacturing base, nd one of the most important sectors within the economy at large. It employs about 500,000 people directly and in supplying industries, and has a turnover of about £12 billion per annum. Many other thousands of people depend on the prosperity of the motor industry for their livelihood.

The debate should be about how we can best achieve a viable and internationally competitive vehicle industry. How can we make those thousands of jobs more secure and build a better future for this vital industry? We have already put £2·2 billion into BL and we are standing behind another £1·5 billion of additional obligations. I ask the House to take this matter seriously. We have to ask ourselves how much longer we can support the company with taxpayers' money, whether we can continue to have these liabilities indefinitely, and whether there are not other options which should be seriously considered. Any responsible Government would at least want to look at the options.

There are two separate and different issues in the Opposition's motion. The first concerns the future of Land Rover-Leyland, where discussions are at an advanced stage. The second concerns Austin Rover, where discussions with Ford have only recently started and the joint studies are at a very early stage.

Let me start with the first part of the Opposition motion, which addresses the discussions in hand with General Motors on the future of the Bedford and Land Rover-Leyland businesses. I heard the right hon. and learned Member for Monklands, East say on television that under no circumstances and on no terms should any merger of Bedford and Land Rover-Leyland be contemplated. I believe that that is a shortsighted and ill-judged assessment. Of course, a condition of any sale will have to be satisfactory assurances and I shall return to this later. If a merger should prove to be the best way of creating a strong industry and preserving thousands of jobs in the long term in the companies and the components supply industry—

Photo of Mr Robert Brown Mr Robert Brown , Newcastle upon Tyne North

On a point of order, Mr. Deputy-Speaker. It seems anomalous that we have a new Secretary of State at the Dispatch Box defending the Government on an extremely important subject, but that only one Cabinet Minister is on the Treasury Bench.

Photo of Mr Ernest Armstrong Mr Ernest Armstrong , North West Durham

The hon. Gentleman knows that that is not a matter for the Chair.

Photo of Mr Robert Brown Mr Robert Brown , Newcastle upon Tyne North

Further to that point of order, Mr. Deputy-Speaker. I submit that it is a point of order for the Chair.

Photo of Mr Ernest Armstrong Mr Ernest Armstrong , North West Durham

The presence of Ministers is not a matter for the Chair.

Photo of Mr Paul Channon Mr Paul Channon , Southend West

As I said, if a merger should prove to be the best way of creating a strong industry and preserving thousands of jobs in the companies—

Photo of Barry Sheerman Barry Sheerman Shadow Spokesperson (Education and Employment)

The Secretary of State is talking about preserving jobs. Will he take into account the experience of David Brown Tractors in my constituency? Six years ago it was sold to an American conglomerate —Case Tenneco International. It then employed 4,000 men and women directly. It now employs 1,100 and that number is diminishing. Is that the pattern which the right hon. Gentleman thinks will save jobs?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

If the hon. Gentleman will allow me to develop my case, he will hear the answer to the question which he and others have been putting.

We are attempting to see what is the best way of preserving jobs in the companies and in the components supply industry —jobs in Bedfordshire, Lancashire, Glasgow and the west midlands. I believe that we have a duty to look objectively at the possible solutions. It is no good putting our heads in the sand and pretending that problems do not exist, or that we can solve them just by throwing taxpayers' money around.

The problems in the commercial vehicle industry are not confined to the United Kingdom. The European commercial vehicle industry has substantial over-capacity. Some have said as much as 40 per cent. over-capacity, and most of the European truck companies are making losses, cutting back capacity and searching for partners. Joint ventures and mergers will increasingly be necessary in order to spread the costs of developing new products and securing economies of scale in manufacturing, marketing and research and development.

As the Labour party's policy document on the motor industry published last year said: Collaborative arrangements, providing scale economies and new market outlets, are exactly the strategy which a manufacturer such as Leyland should seek to pursue".

Photo of Mr Paul Channon Mr Paul Channon , Southend West

The United Kingdom, and British Leyland in particular, cannot be immune from those trends. Land Rover-Leyland and Bedford together made losses of over £120 million in both 1983 and 1984, and there were further substantial losses in 1985. That cannot continue. Some solution has to be found. Capacity has already been cut and plants closed.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Will the right hon. Gentleman give way?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

No, I will not give way.

Some other strategy has to be followed. It would be a disgrace to allow a withering away of those businesses. A merger, if the terms are right, could be the salvation of both.

Both companies have a strong British tradition and are committed to the United Kingdom.

Photo of Mr Robert Adley Mr Robert Adley , Christchurch

As part of the opportunities which my right hon. Friend is exploring, has any discussion taken place with any European manufacturers, and does he intend to explore that avenue?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

No discussions have taken place with European manufacturers. I do not think that any European manufacturer would be interested in the proposals which the House is discussing. They both have their European —[Interruption.] I had assumed that the House would wish to hear the argument. The Opposition asked for this debate. I imagine that they want to hear the reply. Both of these companies have their European research and development centres in this country. Both of them manufacture all of their European and Third world trucks here. Bedford has manufactured over 4·5 million trucks here since 1931 and has exported over half of them. Bedford has probably been the major supplier of trucks to our defence forces since before the second world war.

Photo of Mr Paul Channon Mr Paul Channon , Southend West


The Bedford company even designed the Churchill tank. One cannot get much more British than that, yet the right hon. and learned Member for Monklands, East referred to a defence risk. Opposition Members do Bedford Commercial Vehicles and its work force a grave disservice when they denigrate the achievements of GM subsidiaries and imply that a merger with Leyland will leave the United Kingdom with only a screwdriver operation. By combining the strength of those organisations the United Kingdom should have a much better chance of retaining a major manufacturing capability and design base, of winning major export orders and of securing the investment and resources which a company the size of GM can provide and which are so necessary for new products and facilities.

Photo of Mr Paul Channon Mr Paul Channon , Southend West

Exactly the same arguments apply to Freight Rover and Land Rover. Both these companies have worked hard to turn themselves around, and I pay tribute to what has been achieved. Despite these efforts, neither is generating the profits necessary to reinvest in new models and facilities and capture world markets, particularly in the face of Japanese competition. The GM route offers greater financial security, vast research and development and other resources and far easier access to markets, especially in North America, where Land Rover and Range Rover have great market potential, but where Land Rover has no distribution network and would have to spend many millions of pounds setting one up.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Will the right hon. Gentleman give way?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

GM's worldwide distribution network—

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Will the right hon. Gentleman give way?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

No. [Interruption.] This is a very short debate.

GM's worldwide distribution network offers even greater opportunities, which I am sure the Land Rover management will seize with enthusiasm if this deal proceeds. Under the GM umbrella, Land Rover will have a more secure future than it currently has or than it could have if it tried to make it on its own.

Photo of Mr John Smith Mr John Smith , Monklands East

The Secretary of State is speaking almost as though a deal has been concluded and he is drawing our attention to possible advantages. Since this is a matter of great consequence to all concerned, may we be told whether the Cabinet has discussed it?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

No deal has been concluded. If the House will allow me to make my speech, it will hear the arguments that I think are important. No decisions have been taken. There are therefore no decisions for the Cabinet to discuss—[Interruption.] I get the impression that the Opposition are more interested in shouting me down than in hearing the truth. All they want to do is create a little party political capital out of this rather than to hear the truth about the motor industry.

I want to talk about real jobs and real people, and about the prospects for the company in a hard, commercial world. The board is well aware that, if left to go their own way, the businesses would be small fishes in a pond full of piranhas and that the interrelationship between the various companies would make a separate sale of one part impractical. As such —

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Will the right hon. Gentleman give way?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

No, I will not.

The future of the component supply industry is essentially tied to the fortunes of the vehicle manufacturers and their success. Before any deal can go forward, we shall need assurances on United Kingdom manufacturing—

Photo of Mr Paul Channon Mr Paul Channon , Southend West


We shall need assurances on United Kingdom manufacturing, research and development, exports, investment and the like. No deal will go forward unless those assurances are forthcoming. The track record of Bedford is a proud one and should give everyone in the industry confidence in the future.

Let me now deal with the other part of the Opposition's motion. As I said at the beginning, discussions between Austin Rover and Ford, which have the full approval of the BL board, are at a very early stage. [Interruption.] I repeat to the House, since I am challenged, that the discussions have the full approval of the BL board. However, the small fish in a big pond analogy applies also to Austin Rover.

The House will expect me to pay tribute to the sustained efforts of the management and work force, who have achieved a highly creditable turnround in the performance of the company in recent years. I repeat to the House that from a loss of £266 million in 1980, the company in 1985 was trading around break-even. It has introduced a successful new model range, to which will shortly be added the XX.

The Austin Rover Group exported over 100,000 vehicles in 1985. Without that progress, the prospects for the survival of ARG as a volume car manufacturer would have been very gloomy. Nevertheless, the House must face the fact that the United Kingdom's market share has not grown as all of us had hoped. The European market share remains very small, at 3·9 per cent., and continued taxpayers' support will be necessary to give the company even a reasonable chance of keeping its head above water. It is essential that we should now build on this progress—

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

Is Freight Rover to be transferred to the Austin Rover Group?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

I dealt earlier with Freight Rover and Land Rover.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

The right hon. Gentleman did not do so.

Photo of Mr Paul Channon Mr Paul Channon , Southend West

Freight Rover is in the same position. It is essential to build upon the progress of the Austin Rover Group and the confidence that it has generated by considering the options for the long-term future.

I agree with the right hon. and learned Gentleman that the car industry is a fast-changing industry. It is at the forefront of technological change, in the use of robotics and electronics, and in the application of new materials, but its structure worldwide is also in the process of change. The age of the self-contained company has gone. Even the giants of the industry feel the need to create links with others. Austin Rover has itself forged links with European manufacturers and buys components from Peugeot and Volkswagen. It also has its design, component supply, manufacturing and marketing links with Honda.

The discussions that have been started with Ford must be seen against that background. They involve an examination of areas of mutual interest to see whether there are links between the two companies which could usefully be exploited to produce scale economies and other benefits based upon European, and specifically British, design and manufacture.

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

Bearing in mind the preeminence of Ford of Europe, what does my right hon. Friend think of the comment of Bob Lutz, the head of Ford of Europe, that Austin Rover is a dead body on a life-support machine? Does my right hon. Friend agree with that comment? Would he like to negotiate with a man who holds that opinion about Austin Rover?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

As I am trying to explain to the House, the talks with Ford are at a preliminary stage. No decisions of any kind have been taken. When he thinks about Ford's commitment to Britain, my hon. Friend will surely agree that Ford's European headquarters are in Britain and that its major research and development centre is in Britain. Most of its trucks and tractors are manufactured here, with an average United Kingdom content of 80 per cent. The cars that Ford builds in this country have a 78 per cent. United Kingdom content. The company invests about £250 million a year in Britain, employs about 50,000 people directly, and is one of the top 30 employers in the country. I hope that no anti-American feeling will come out of all that.

Ford exports, by value, 20 per cent. more than British Leyland. It manufactures twice as many gear boxes and engines in this country as does BL, with obvious benefits to the United Kingdom component supply industry.

The Labour party document says: Ford Uk has been the strongest force in the British car industry for over a decade.… As an integral part of Ford of Europe's production system, Ford UK has enormous resources in terms of design, investment and management.

The detailed examination that is now under way may —I emphasise "may"—suggest that a comprehensive merger of the car operations of those strongly British orientated companies would make sense. Perhaps it would make better sense than the alternative "go it alone" policy or other joint ventures and would be more likely to produce a stronger United Kingdom manufacturing base, with more secure long-term job prospects for all. However, it is too early to say. Neither we nor the BL board have closed our minds to other options. I must ask the House to support me in the view that it is ridiculous at this stage to say that we should not even consider the options.

No conclusions have emerged, and no judgments can be made until at least the first stage of the studies is complete. Meanwhile, as I think the House will agree, both Ford and BL recognise the need to reach early conclusions so that the period of uncertainty is reduced to a minimum. If the studies show that a merger could create real benefits and lead to a stronger British industrial base than any other likely options, it would be foolish not to consider the conclusions most seriously.

Despite the undoubted progress that BL has made, it is still a long way from becoming fully viable. As I understand it, the Labour party's answer is to keep BL alive by a drip-feed of taxpayers' money to replace its losses while sheltering behind a wall of protectionism and anti-Americanism. The Labour party is guided by an isolationist mentality which welcomes a Ford or a GM when an engine plant at Bridgend is in prospect. It then emerges from its shell to throw tens of millions of taxpayers' money around in an effort to woo a company which it otherwise pretends it would rather do without.

My concern is to see a viable and internationally competitive motor industry in the United Kingdom. That is the only way in which we can safeguard the thousands of jobs which are dependent upon it. I am determined that every option which offers a way of achieving that should be examined. I urge the House to reject the motion.

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath 5:41 pm, 5th February 1986

We have just heard a statement which amounts to the biggest act of political and industrial treachery that the country has ever heard. The give-away for the Government is the total secrecy with which the negotiations were initiated and have been conducted. The Minister said that the discussions are at an advanced stage. At the end of his speech he even had the impertinence to tell us that we should remove the uncertainty. Can he tell us who initiated the developments? They could not possibly have been initiated by the BL board; they must have been initiated by the Government. The Secretary of State shakes his head. I am willing to give way if he wants to tell us that British Leyland initiated the developments. Who did initiate the developments?

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath

If Ford approached BL, where did General Motors enter the picture?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

I do not want to interrupt the right hon. Member, because this is a short debate. There are two issues, GM and Ford. I thought the right hon. Gentleman was talking about the Ford proposal. Ford approached the Government and talks are taking place between Ford and British Leyland.

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath

The Secretary of State has still not told us how General Motors entered the act. Was it before or after Ford? The House is entitled to have an answer so that the motives of the Government may become crystal clear.

Whatever view one takes about the merits of the case —I shall express my view about them—the fact that the negotiations are, according to the Minister, at an advanced stage without any reference to the House and without public discussion can only lead us to believe that the motives of the Government are very low. That is of great importance.

The House will understand the terrible feeling that is already apparent throughout industry in the west midlands, and particularly in Birmingham, and on all sides of the political spectrum. The west midlands has been reduced almost to an industrial wasteland during the last six years, and the position is bound to get worse.

The Minister talked about the components industry, but he has failed to give us an assurance or to set out the minimum terms and conditions for the British content of motor manufacturing which, one hopes, would be legally binding. The Government set great store by such conditions.

There is nothing in the figures available to us to give us confidence in what the Secretary of State has told us. We know that 70 per cent. of vehicles manufactured by Ford in the United Kingdom have an 80 per cent. United Kingdom content; 45 to 56 per cent. of vehicles manufactured by General Motors in the United Kingdom have only a 49 to 50 per cent. United Kingdom content, although the Government hope that that figure will increase. There is no assurance in those figures for the British components industry, which is in a parlous state.

We have evidence before us about Peugeot Talbot. In spite of all that we have been told in the past, we know that at Coventry French components are being used in the manufacture of cars to the detriment of the British components industry. Therefore, the Minister knows perfectly well that he will not be able to come to the House with any legally binding agreement about the minimum percentage of British components if the deals under discussion are concluded.

The House must find out what the atraction is for Ford. In the 1970s the strategy of Ford was to develop a world car; in the 1980s its strategy is to develop a world truck. Design is a key feature in that strategy. The first casualty of any development such as the Minister is examining will be the design potential and capacity of the British motor industry. Some smaller components may be manufactured here, but as centralisation and rationalisation take over, all the components of Ford and General Motors will have to be made to the design of the country of origin, which will not be this country. Therefore, the position of the British components industry will worsen progressively.

I agree with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) that the timing is absolutely appalling. Just when we have had massive investment in the British motor industry and the possibility of a breakthrough for Austin Rover and Land Rover, the Government have initiated takeover talks.

We have not been told by the Government—and I do not suppose we shall be told — about the anticipated job losses. It is only common sense that if Ford and General Motors succeed in their endeavours, there will be standardisation of engines, components and electronics, which must be to the detriment of British manufacturing, and particularly the components industry.

The new Rover 800 has had a successful launch and may emulate the success of Jaguar in the American market. That again brings into question the competence of the Government as well as their strategy in undertaking talks at this time.

Job decline in Birmingham could not be more, disastrous. I want the Government to return to the understanding that they cannot divorce the destruction of the British manufacturing industry and the British motor industry from the terrible social consequences that have followed that decline. Anyone who, like me, represents a neighbourhood such as Lozells —it is part of the Lozells-Handsworth syndrome which occupied the attention of the House recently—anyone who has 34·5 per cent. unemployment, anyone who has at least 70 per cent. of school leavers unemployed, and who then sees the rest of manufacturing industry in Birmingham threatened, faces responsibility for the most serious social consequences.

It is no good saying to whole generations of school leavers and young family men—

Photo of Mr Denis Howell Mr Denis Howell , Birmingham Small Heath

—and women—that there is no hope for them and that even the little security that they now have will be sacrified or threatened by a sellout on this scale. Ministers who contemplate that, who fail to provide alternative industries, cut investment in the social programme for housing and schools and now threaten jobs at Austin Rover and Land Rover, deserve heavy censure not only in the House, but in the country.

I pay tribute to Conservative Members from Birmingham and the midlands who have courageously stood up in the past few days, realising that this is not a party political matter but one of the greatest concern for the city and the region. They know perfectly well that the political consequences of this is that all of them and all those people will be consigned to the knacker's yard at the next election. The only qualification that comes out of the Chicago monetarist school is the ability to be a knacker's yard operative.

Photo of Mr Edward Heath Mr Edward Heath , Bexley Sidcup 5:51 pm, 5th February 1986

May I add my congratulations to those which have already been offered to my right hon. Friend the Secretary of State on his appointment. I wrote to him immediately but I want to congratulate him publicly. Having been Secretary of State for Industry, Trade and Regional Development more than 20 years ago, I know that that Department, even though it no longer has regional development, is one of the most difficult and onerous of all the Departments of Government. It is more onerous than that of Chancellor of the Exchequer and I wish him well in it.

The debate today is important because it goes to the heart of Britain's industrial future and the Government's attitude towards it. Therefore, I regret that there should be so few members of the Cabinet on the Government Front Bench.

Many of us have watched the deterioration and erosion of Britain's industrial base over the past few years and we have held our peace. History may blame us for that and hold us culpable. But there comes a time when, despite the natterings behind me, one has to protest publicly against the proposed action of the Government towards the motor industry. The business and financial world, quite apart from the members of the Conservative party, are stunned by the revelation that the Government are proposing to sell the remains of the motor industry to American firms.

I hope that my right hon. Friend will not accuse me of being isolationist. I have been accused of many things in my life, but not of being isolationist. Moreover, I hope that he will not accuse me of being anti-American. I first went to the United States in 1939 as a student. I fought alongside the Americans. I have worked closely with four presidents of the United States. I am a great admirer of the Americans. Moreover, I admire what General Motors has done. I well recall one of the most famous phrases in history under President Eisenhower's Administration, that what was good for General Motors was good for America. That may well be true, but it does not follow that what is good for General Motors is good for Britain, and that is what concerns me.

My right hon. Friend accused the Opposition of playing party politics, of wanting everything in public ownership and so on. That is of no concern to me, nor, I think, to many of my right hon. and hon. Friends. What does concern us, I must repeat, is the future of the motor industry and what remains in British hands.

The onus of proof in this case rests on the Government. They cannot try to shift the responsibility on to the boards of the firms. They said that they were doing so in the case of Westland. I have withheld comment on any aspect of Westland so far and I want to make only one now. No Government is justified in wiping its hands of a company which is integral to our defence programme. I am afraid that that is a matter of principle for me. That is all that I want to say about Westland.

The Government are the owner of the motor industry and so they must accept full responsibility for what they do about it. Moreover, two Governments—the Labour Government up to 1979 and this Government —have, apparently, put £2·6 billion into the motor industry. Very well, that is a second reason why the Government must accept full responsibility for what happens in the case that we are discussing tonight.

It has constantly been said that because £2·6 billion has gone into the industry we must make an end of it. On any ordinary business judgment, to have put £2·6 billion into a concern would have given one every justification for carrying on. When my right hon. Friend rightly pays tribute to the workers and the management of the remaining firms and says how well they have done—

Photo of Mr Edward Heath Mr Edward Heath , Bexley Sidcup

I agree. But what sort of response is it to say, "Now we will sell you out to the Americans"? It is no response at all for what they have achieved, even if they are not yet perfect and even if they cannot at the moment do without some financial contribution from the Government. The point of having contributed £2·6 billion is that the Government and my right hon. Friend should now continue to do what is necessary to put those firms completely on their feet.

Is that possible? I believe so. But apparently some of my hon. Friends do not. What is this fatalism about the motor industry? What is this despair about British industry? The Conservative party wants —the Government are said to want the same—to restore faith in Britain and what we do. How do we restore faith in our industry by selling out to the Americans?

I said that public opinion, business and finance were stunned by the announcement. They do not know what to expect next. What else will the Government negotiate to sell? Will we get rid of Rolls-Royce to Pratt and Whitney because we still have to support Rolls-Royce? Some Conservative Members say that we are anti-American, but does anybody imagine that the Americans would ever allow their motor, aero engine or aircraft industries to be sold to foreigners? Not for one moment would they consider it. I know that full well from my discussions with President Nixon and his advisers over Rolls-Royce and Lockheed and how we managed to save those.

Let us get away from this so called anti-Americanism. What is happening and is visible in public opinion is that because of Westland, and now because of this, the public are becoming anti-American. They do not want to see our country and our industries handed over more and more to the American firms.

We have heard about international investment. It has come to Britain with Nissan in the north-east. That company has started a new plant, provided the money for it, created new jobs and is providing cars that it will export for us. By the way, when we are discussing components it must be remembered that Ford has a deficit on its payments. It imports more than it sells abroad and that does not help our trade position. Nissan is a constructive investment providing plant, jobs and exports. It is completely different when a firm comes in, buys what we have and does not pay the Government for the £2·5 billion that they have put into the firm.

We export capital abroad—to my great regret, far too much capital. Firms know that with interest rates as they are, with sterling as it was in 1981—which destroyed our markets —and with sterling fluctuating as it is at present, they cannot be successful here. That is why they invest abroad. Does the result of their investment abroad return? No, it stays abroad for further investment. Every penny of profit that Ford makes here goes back to the United States. When American Ford took over the whole of the shareholding—it was formerly held by individuals in Britain who were bought out —part of the arrangement was that all the profits should go back to the United States. The same will happen with General Motors. That is detrimental to British interests.

Photo of Christopher Chope Christopher Chope , Southampton, Itchen

Is my right hon. Friend aware that Ford has just invested £100 million in its Transit plant at Swaythling in Southampton?

Photo of Mr Edward Heath Mr Edward Heath , Bexley Sidcup

The profits will all go back to the United States, and that will happen with General Motors. My hon. Friend the Member for Southampton, Test (Mr. Hill) mentioned General Motors plants. We are not denigrating General Motors plants in Britain —[HON. MEMBERS: "The Opposition are."] I am not responsible for that. What remains of our motor industry, which is vital and which has a defence interest, should remain in British hands and not be completely taken over by the United States.

General Motors wants to buy British Leyland, either because it can make a go of it or to wind it up. Those are the options. My right hon. Friend the Secretary of State does not want it to be wound up. Why is it that only General Motors can make a go of it? Why do we not tackle the problem of management and education? Instead of cutting back on our universities and technical colleges, why do we not deal with the problem through the education of management? Obviously it will take time for a firm like BL, which was in the doldrums during the 1970s, to recover completely, advance its technology and regain its markets. It has done remarkably well. It has regained the percentage of the market that it had in 1973, which was a good percentage.

I am told that BL now has truck technology that is in advance of that in America. That is why General Motors wishes to buy it. It will always buy technology that is in advance of its own and keep it for itself. I do not blame General Motors; that is what it has always done. America did the same over atomic power with the McMahon Act. We contributed to the atomic energy knowledge of the world during the second world war. Afterwards America clamped down with the McMahon Act and said, "Nothing more." That is something we will always remember in relation to defence. Some of us may have long memories, but there comes a time when experience is useful.

If British Leyland is sold out to overall American control, our control is lost. I ask my right hon. Friend, who is an honourable man, not to talk about guarantees, because they will not be kept. They have not been kept in the past. Already his predecessor has been complaining about the fact that Vauxhall uses less then 50 per cent. of British components. British Leyland uses up to 92 per cent., so that that type of guarantee is useless. Any guarantee about the number of jobs is useless because, if it wants to close down, it merely goes to the Secretary of State—as I know from personal experience—and says, "If we cannot wind down, we shall pack it in altogether." We would be faced with that alternative as a result of a handover to American firms.

It is clear that we must forge ahead with technology and not hand over what we have to American firms. An undertaking has been given about exports, but that will not be kept. We know that from experience. None of the undertakings will be kept if the position changes. Above all, when the automobile industry goes into a recession in the United States, British plants will be wound up. Alas, that happens in our country. Some of us have fought against it for years. Plants are established in Scotland and Wales; a recession arrives, the midlands keep going and Scotland and Wales are shoved out.

Exactly the same will happen to the British motor industry. It will be wound down to keep Detroit going. General Motors and Ford carry out the greater part of their research in Detroit. I have been a round their laboratories. What will our young people think? There will be only one place for them to go if they have any technological knowledge or if they wish to gain technological experience. That is how we shall lose the best of our young men to the United States. We have already lost far too many and I do not wish to see them lost in that way.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

Bathgate, in my constituency, still has the greatest concentration of machine tools under one roof in Europe. Many of us ask what will happen to that great concentration of skill and expertise.

Photo of Mr Edward Heath Mr Edward Heath , Bexley Sidcup

I hope that it will be maintained, because I hope that we can persuade the Government to abandon this project.

I recommend an attempt to develop European cooperation. My right hon. Friend has said that no attempt has been made to do so, but that we must consider all the options. He attacks the Opposition for saying that that was an option that they did not want. If he has not examined the European option, his case is not proven. In the European option, we maintain control through the Community. The Opposition may not wish to acknowledge that, but we could continue to maintain control over British firms that are co-operating in Europe with European firms. It is said that there is overproduction and overcapacity, but is that a reason for selling out to the Americans? It is a reason for Europe to be sensible, to adjust its capacity to world demand and, with efficiency, to gain a larger share of the world market. In present circumstances, the United States becomes more and more protectionist and would not take in our vehicles produced by General Motors and Ford. The alternative option is to work for a European arrangement —not a takeover, but an arrangement—which would be a joint operation. We have been successful in defence. There is no reason why we should not have success in the automobile industry.

I wish to be plain and honest. I cannot support the Government's proposition to sell out the remains of the British motor industry to American firms. I shall resist it in every way possible.

Photo of Mr Ian Wrigglesworth Mr Ian Wrigglesworth , Stockton South 6:09 pm, 5th February 1986

The right hon. Member for Old Bexley and Sidcup (Mr. Heath) and the right hon. and learned Member for Monklands, East (Mr. Smith) have completely demolished the Government's case for allowing parts of British Leyland to fall into the hands of two giant multinational American companies. A reasonable person listening to the debate would not think that the Government had grounds for proceeding along the path that they are contemplating. They are suggesting that a key company in a core sector of British manufacturing should be handed over to a major competitor in volume car manufacture and a major competitor in buses and trucks. If the volume car business fell into the hands of Ford, and if the proposals for handing over the truck division to General Motors went ahead, 60 per cent. of the British car market would be dominated by American multinational companies.

Why is it important to retain the ownership of British Leyland in the United Kingdom? Cars are central to British manufacturing industry, not only in metal bashing and engineering but, as Japan, the United States and almost every other country have demonstrated, in electronics, in materials such as ceramics and plastics, and in almost every high-skill and high-technology area. Therefore, it is vital that we retain a thriving British presence in the industry.

It is not surprising that, during the past 30 years, the Japanese have done everything possible to have a thriving motor industry. As the right hon. Member for Old Bexley and Sidcup said, it is not surprising that President Eisenhower said what he did about General Motors being good for America, because the motor industry is central to the economy of any country. British Leyland and the British people will have been dismayed by the revelation that talks are taking place. The company, its employees, the House and the people believed that the Government had a clear strategy for British Leyland's future. It was a strategy of collaboration with Honda that would allow British Leyland to thrive as a medium-size vehicle manufacturer, I hope growing into a larger manufacturer, which could meet the competition from the Pacific basin, the rest of Europe and the United States. It is almost impossible for any vehicle manufacturer to survive without having a foothold in the Pacific basin, and it was clear that the link provided British Leyland with access to the knowhow and technology at Honda and with access to Honda's market. Thereby, it could build a successful business not only in Europe but elsewhere in the world.

The discussions that were revealed this week have called that strategy into question. The Minister has a responsibility to spell out to the House and to British Leyland exactly what will happen to the Honda option if those discussions come to fruition. I hope that he can make that clear. As the right hon. Member for Old Bexley and Sidcup said, the Government have invested billions of pounds of taxpayers' money in British Leyland, and it is only fair and reasonable that taxpayers should have some return on that investment.

British Leyland has just begun to turn the corner. It has not made extra demands upon the public purse in recent years, and this should have been the last occasion for the Government to suggest the sale of parts of the company or its major volume business to its American competitors. Instead, they should have reinforced the success that the employees and management of British Leyland have achieved and helped them to achieve even greater success.

I hope that the Government will reconsider the permission which they gave to the company to proceed with discussions with General Motors and Ford. I hope that the Government will pursue their previous policy, so that if they wish to dispose of parts of the company that are not central to the volume car business, such as Land Rover, management buy-outs can become an option. Such a buy-out allowed Jaguar to develop and succeed, which has benefited not only the midlands but the entire country, and justified the previous investment in that company. When the Minister replies to the debate, I hope that he will tell the House that the possibility of employee or management buy-outs of parts of British Leyland will be considered and discussed with the management, and whether offers of assistance will be made to management should they wish to consider buying out.

Photo of Eric Forth Eric Forth , Mid Worcestershire

Does the hon. Gentleman agree that there is a distinct difference between the market potential for a prestige executive car such as Jaguar, which has been extremely successful in the United States, and the truck and volume car markets, both of which have overcapacity? Is not drawing a parallel between them, as the hon. Gentleman is attempting to do, very hazardous?

Photo of Mr Ian Wrigglesworth Mr Ian Wrigglesworth , Stockton South

I entirely accept the hon. Gentleman's point about the bus and truck divisions, where there is obvious over-capacity and a major structural difficulty. However, I was referring to Land Rover, where the position is different. It has been one of the most successful parts of British Leyland, and many of us are amazed that Leyland has been unable to make it a greater success. Not long ago, there was a waiting list to buy Land Rovers. I cannot imagine any other commercial vehicle manufacturer not making a success of a vehicle for which there are waiting lists. Indeed, it is sad that the Government did not come forward long before now with proposals to support the management of Land Rover in making a buy-out offer for that potentially successful company, as they did for Jaguar.

I hope that the central reason for the debate will not be lost. Although the truck and bus divisions and Land Rover are important, the overwhelming importance lies in the volume car business. It has implications for components suppliers and it plays a key role in the motor industry. We should not lose sight of that fact.

If the Minister has any doubts about the strategy of the companies that he is considering allowing to buy parts of British Leyland, especially Ford, and whether they have any desire to look after British interests rather than the interests of multinational corporations, he should examine the statistics for the United Kingdom content of cars sold in Britain between 1973 and 1984. The United Kingdom content of Ford cars sold in this country fell between 1973 and 1984 from 88 per cent. to 46 per cent. For Talbot it fell from 97 per cent. to 42 per cent. and for Vauxhall-General Motors it fell from 89 per cent. to 22 per cent.

That is one of the reasons why we have lost tens of thousands of jobs in the motor car industry. If the Minister examines the track records of those companies, he will see why there is so much anxiety about the possibility of British Leyland falling into foreign hands. If the decision-making process and the design authority are taken away from this country, the technology and jobs will disappear and this country will become a branch factory outpost of the multinational corporations.

As the right hon. Member for Birmingham, Small Heath (Mr. Howell) said, those hon. Members who have in their constituencies branch factories of corporations which take decisions and have headquarters elsewhere know how damaging that can be once the recession comes. I hope that the Minister will listen to the clear voices he has heard in the debate and the clear view of the country, which will tell him to think again about the strategy he is contemplating for British Leyland and ensure that the company remains in British hands.

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove 6:21 pm, 5th February 1986

I hope that the House will forgive me if my delivery lacks polish and point. I have not been able to speak in the House for 16 months because of my position. I should make it clear that I am speaking this afternoon as a constituency Member, representing the constituency with the largest number of car workers and component workers in the country, and not as the vice-chairman of the Conservative party organisation.

After listening to the Opposition today and reading their motion, I am reminded immediately of how selective their memory is. Have the Opposition forgotten that Leyland, the successful and famous lorry company, was compelled to make a forced marriage with various car-making companies by the right hon. Member for Chesterfield (Mr. Benn)? The wheel has now turned full circle and we see Leyland Vehicles in dire trouble and the car companies unable to generate the cash to sustain their investment and distribution. It is a sad and serious day for the motor industry that that has come to pass, but the roots of the matter lie with the right hon. Member for Chesterfield. Have the Opposition, in their xenophobia and pseudo-anger this afternoon, further forgotten that the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) was tripping over himself in his desire to hand out taxpayers' money to get the Ford engine plant established in Bridgend? No account was taken at the time of the effect that that would have on Austin Rover or the midlands.

What about the dispersal policies of the Labour Government and their desire to take the motor industry away from the midlands and its concentration and put it in Scotland and Liverpool? All those places have subsequently collapsed at great cost to the taxpayer. The Opposition now have the effrontery to say that the Government are doing down the motor industry. What a nerve. My goodness me, the Opposition should be accountable to the House and to their constituents for their actions.

In case my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) gets the wrong impression, I must stress that I am not lacking in optimism or fight. I have a record of fighting for the motor industry which is as long as that of any Member. I am proud of that and I intend to continue my efforts.

This afternoon we are trying to assess how we should consider the matter now that the damaging leak has become public property before decisions have been made. The more the Opposition try to raise the temperature and paint a picture of woe, the greater is the commercial damage and the certainty that more jobs will be lost. The Opposition are pleased because they see that as a weapon in their efforts to bring down the Government. That is the only reason why the Opposition are raising the matter.

There is genuine uncertainty and anger in the west midlands. I acknowledge what the right hon. Member for Birmingham, Small Heath (Mr. Howell) said and I accept that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) gave effective voice to that uncertainty and anger.

We have suffered in the west midlands and we find it difficult to understand how money is found for British Steel, which puts private firms in the west midlands out of business —an issue on which I resigned earlier from the Administration—and why the fuel and energy costs of the National Coal Board and other nationalised industries are subsidised at the expense of competing firms in the west midlands. When there are difficulties in the west midlands there is apparently some obstacle to helping us. I recognise that that is a genuine fear which has been effectively voiced.

The Opposition seem to have forgotten the debate about Bathgate and the right hon. Member for Small Heath gave us the Opposition's only prescription for dealing with the. bus industry. The Opposition believe that we should subsidise routes on which people do not want to travel and that fares should be subsidised to attract people on to those routes. Many people do not want to use these buses which are, in any case, unsuitable vehicles for many roads. The Opposition then believe that we should subsidise the bus manufacturers. It is a vicious circle and there is no future along that road. The Opposition deliberately set their face against the future and look back selectively to the past.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

Will the hon. Gentleman give way?

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove

I am sorry, I shall not give way as I am in a hurry to allow other hon. Members to take part in the debate.

An examination of the truck industry will reveal that the Leyland vehicle, the Road Train, is an award-winning design. I had the pleasure, with the hon. Member for Preston (Mr. Thorne), of welcoming that vehicle outside the House of Commons as a demonstration of Leyland Vehicles' achievements. Leyland is in a strong position with regard to manufacture and technology but its marketing and distribution side is not so healthy. A powerful company could give assistance to Leyland but no Government or taxpayer could supply it. British Leyland's efforts deserve such assistance.

I am not concerned for the position of Leyland Vehicles as much as I am concerned for the position of Bedford Vehicles as a result of any proposed merger I am confident that Leyland Vehicles has the strength to compete and it has demonstrated that. I do not take such a pessimistic view of our domestic technology, design and construction. Rather I believe that it is the question of distribution and marketing, especially overseas, that is essential. No amount of taxpayers' money or Government purchasing will help in that respect. Only overseas marketing will assist because the British market is so limited.

My right hon. Friend the Member for Old Bexley and Sidcup fought in the desert with my father-in-law in the Honourable Artillery Company. To my knowledge they went to the front in Bedford trucks.

Photo of Mr Edward Heath Mr Edward Heath , Bexley Sidcup

I should like to correct what my hon. Friend said. I never fought in the desert, let alone in a Bedford truck.

Photo of Mr Hilary Miller Mr Hilary Miller , Bromsgrove

I was perhaps giving my right hon. Friend more credit that he should have had. He did, however, certainly serve in the HAC with my father-in-law who was definitely in the desert.

The hon. Member for Stockton, South (Mr. Wrigglesworth) raised the difficulty about the inclusion of Land Rover in the deal. I should have liked Land Rover to have the chance to operate by itself, although the success of that company has been greatly over-stated in the House. One need only look around the farmers and growers of Worcestershire to see what vehicles they are driving. They are not using Land Rovers; they are driving Land Rover derivatives, lighter four-wheel drive vehicles with a greater degree of comfort for their wives who can use the cars to take the children to school, go to the post office and do other things that wives do.

The failure to develop the Land Rover range has put the company into its predicament. It needs substantial financial resources. The difficulty with the management buy-out solution is that, unless there is substantial financial backing, it will not be able to produce the necessary derivatives. I join those hon. Members who seek assurances that Land Rover production will remain arid will be developed in this country. That is my reservation about the General Motors proposals.

The Austin Rover proposals are in a different category. I say that not because I live in the west midlands but because the talks are by no means so far advanced. The Opposition say that they have been taken by surprise by the GM proposals which have been touted in the press for months. They have not done their homework, because if they were to read BL's corporate plan they would see clearly set out that its future was seen as an assembler and as a manufacturer of some specialised items only. It was inevitable that once the Ford-Fiat talks broke down the Ford Motor Company would seek another avenue to reduce the amount of over-competition in the European market. It amounts to about 2 million vehicles out of a 3 million worldwide overhang. That is serious.

One need only talk to one's local dealer about the amount of profit he can make on a car sale now to know that dealers wish for a return to a much more orderly market with some prospect of a profit. Their reactions will be governed by that more than by any other consideration. They will influence their customers.

We must have an early resolution of the problem because of the commercial damage being done. When Austin Rover is trying to set up a new agent distribution network in America to handle the new Rover models; when it is trying to set up Austin Rover Japan to promote not just its production but the Peugeot 205 and Jaguar sales; when it is about to conclude an agreement with Honda for the production of additional models in the west midlands; and when the new Rover replacement upon which the company's marketing and export strategy depends is about to be launched, a huge uncertainty is cast on the scene. There will be doubts amongst suppliers, dealers, customers and, more importantly, the work force which, over the past 12 months, has given such a convincing demonstration of what can be achieved. We owe it to them to end this damaging uncertainty which could be commercially crippling if it is allowed to continue beyond the end of this week.

I am more than happy to support the Government tonight, because it is significant that their amendment does not mention Austin Rover. I believe that the plan is forward-looking. People who object to the talks conveniently overlook the well-known fact that Austin Rover has been engaged in talks with Volkswagen, Renault, perhaps Fiat, and BMW. It is no surprise that the talks have been going on. I hope that the Ford initiative is found to be unacceptable, although as a west midlands Member I am confident that the manufacturing costs in Longbridge are far lower than those in any Ford plant in Europe. If any sale were to be fairly conducted, production would be assured at Longbridge, but my fear is that with Ford coming in Honda would pull out. The utilisation at Longbridge would drop and the costs would rise. The company would be unfairly threatened on that basis.

Honda's reaction to the announcement is vital. What assurances have the Government been able to obtain about its continued co-operation? What is the Japanese industry's attitude to continuing the voluntary industry agreement if there is to be no native British industry to protect? That is an important question. What is Nissan's attitude? It was brought into this country on one assumption and it is now faced with a completely different market. There are serious questions that will need quick answers, but I am happy to support the Government in their amendment.

Photo of Mr George Park Mr George Park , Coventry North East 6:34 pm, 5th February 1986

It is obvious that the hon. Member for Bromsgrove (Mr. Miller) was trying to earn his corner as the vice-chairman of the Conservative party organisation. Even he could give only qualified approval to the proposals, because the implication of what he said was that if the Government's amendment had included the words "Austin Rover", he would not have been able to join the Government in the Lobby tonight.

The discussions about the future ownership of parts of BL have profound implications for the whole of the United Kingdom, but once again the information, as my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) said, has had to be dragged out of the Government by a private notice question and by the Opposition providing time for the debate today.

We are debating an industry which is the backbone of the economy and is the country's largest employer, but which will be put sadly out of joint if the current discussions to sell part of BL are allowed to continue. Despite the assurances on which the Secretary of State said he would insist, let there be no mistake about the outcome. If General Motors is allowed to buy BL's commercial vehicle division, and if the Ford Motor Company acquires Austin Rover, there will be a clear conflict between the worldwide strategy of those multinationals and the United Kingdom's national interest. In the process, thousands of jobs will be lost, and the capacity to design and build vehicles, with the skill that goes with that, will also go.

The Secretary of State believes that those acquisitions will provide a more secure future for BL's employees. Over-capacity has been mentioned. Does the right hon. Gentleman imagine that BL's market share would be added to that of General Motors, or Fords, and that everything would go on as before? Is it not likely that, following those acquisitions, there would be rationalisation—the polite name for sackings—because of the overlap and similarity of the model ranges? Has the right hon. Gentleman never heard of tied imports and the lack of exports from the United Kingdom by the multinationals? Is he aware that their design capacity is located outside the United Kingdom and that the only remaining such capacity is in BL? Is he aware that the key decisions affecting the multinationals' operations are taken well outside the United Kingdom? If the Government want Great Britain to become just another star on the United States flag, why do they not say so?

From the Government's recent and current action, it is clear that they have no confidence in British management or in the work force, so why should the people of Britain have confidence in the Government? The Government have not lifted a finger to do anything about the miserable Austin Rover-Spanish export quota or the differential tariffs, a subject which I have mentioned many times on the Floor of the House.

The apparent justification for the dicussions, put forward by the Prime Minister, is that BL cannot be allowed to be a continuing drain on the taxpayer. The right hon. Lady should have distinguished between the different parts of BL before she made that statement.

It has been said that Austin Rover has had no taxpayer's money for more than two years. It was £250 million in the red in 1980, but it is breaking even now. It should not have escaped the attention of the House that all the European volume producers are incurring losses. Land Rover, incidentally is in profit.

Productivity at Austin Rover is as good as, if not better than, that of its competitors. In a recent survey by The Engineer magazine, the Metro line was classed as the most efficient in Europe. Production levels at Austin Rover, with the introduction of new technology, will be up to Japanese levels in two years, if it is allowed to carry on. As I speak of the Japanese, it reminds me of the so-called gentleman's agreement between the Society of Motor Manufacturers and Traders and its counterpart in Japan. This agreement limits the imports of Japanese vehicles to 11 per cent. per year. If there is no home-based industry, there is no need for the agreement, which is entitled JAMA, and therefore there will be no restrictions on Japanese imports. It follows that there will be a squeeze on Ford, GM, and Peugeot.

The acquisition of Leyland Trucks makes sense to GM. It allows GM to buy a market share in Europe and it will give it better facilities and better engines. The repercussions in jobs, however, could be felt at Luton or Dunstable. It will not solve the problem of over-capacity for either GM or Ford, but it will provide an opportunity for them to restructure their European operations. Any assurances given to the Secretary of State will be pushed to one side in the face of the intense rivalry between these two companies. With the acquisition of Land Rover, GM will acquire a type of vehicle that it does not make, but the defence implications of such acquisition have not been properly answered.

In this past month, of the 41,000 vehicles sold by Ford, only 27,000 were made in the United Kingdom, and of the 29,000 sold by GM, fewer than 15,000 were made in the United Kingdom. If the Minister thinks that this trend will not accelerate if discussions come to fruition, he knows little about the motor industry.

Photo of Mr Dave Nellist Mr Dave Nellist , Coventry South East

My hon. Friend is discussing the reasons for GM's wish to take over part of BL. I am the ex-employee of Self Changing Gears, which is in the constituency of our hon. Friend the Member for Coventry, North-West (Mr. Robinson) and which is part of the BL empire, does he agree with me that GM may wish to take over the firm in an effort to eliminate competitors for certain contracts for gearboxes and thus ensure that it has all those contracts? The employment consequences in Coventry of such an acquisition would be tremendous.

Photo of Mr George Park Mr George Park , Coventry North East

I agree that the situation outlined by my hon. Friend is most probable.

A considerable proportion of the content of the vehicles sold by Ford and GM is sourced from Europe and Japan, as distinct from BL, which obtains 92 per cent. of its components from Britain. The effect of a takeover by or a merger with Ford or GM would be disastrous for the components industry in the United Kingdom. Ford and GM would source their low technology parts from the United Kingdom, but high technology parts would be shipped in from elsewhere. Local content would be increased, but the impact on skill and technology would be immense.

The Minister has suggested that such a takeover would lead to greater security of employment. My personal experience of the takeover by Chrysler of Rootes was that it did not provide greater security. When Peugeot took over from Chrysler, it did not want the production capacity, but it did want access to the dealer network. Does the Minister imagine that the dealer network will remain intact after acquisition by Ford or GM? How many jobs and how many businesses would go in that rationalisation?

Despite the Government's avowed support for small businesses, for the vehicle industry the Government seem to believe that big is beautiful. By their tremendous efforts, the management and work force at Austin Rover have shown a medium-sized car producer can survive and prosper, given flexibility among the work force and proper equipment. Austin Rover is at the forefront in the use of new technology, and Ford would love to gain access to its design and production technology.

Austin Rover has recognised that it is not in a position to do everything, so it has collaborated with Honda, initially with the Acclaim, and currently with the 2·5 litre engine for the Rover 800, with which it hopes to break back into the United States this summer. Austin Rover has developed and built the 1·3 engine for the Rover 213 at Longbridge, and it uses the Honda five-speed gearbox in the Montego and Maestro. It is Austin Rover's intention to build this gearbox at Longbridge, with the addition of 400 jobs. Since Honda would not wish to collaborate with Ford, the Montego and Maestro would be stranded, with no five-speed gearbox, and plans to get back into the United States this summer with the Rover 800 would be aborted.

Collaboration is one thing; takeover by a foreign company is another matter. The bidders have made it clear that it is their intention to reduce capacity in the bus division because the bus market has collapsed as a result of Government policy on public transport, which has stopped orders from local authorities. Throughout the motor industry, employment has fallen by 176,000 since 1979. Employment in the west midlands, in particular, has been decimated. The Government are apparently so calloused against their record-breaking unemployment figures that they are prepared to contemplate and even encourage discussions which will undoubtedly lead to more job losses.

It would be interesting to know who made the first move—did the multinationals approach BL, or did the Government approach the multinationals—but shall we ever be told? Taxpayers' money has rightly gone into BL, but it needed the wise use of that money to acquire and develop the latest technology, tremendous efforts by management and a willing work force, good industrial relations and a belief in its products to bring BL to a point of viability. Is it now to see those joint efforts auctioned off in the market place, creating disillusionment and further unemployment, all for the sake of political dogma?

Photo of Mr Robert Atkins Mr Robert Atkins , South Ribble 6:48 pm, 5th February 1986

This is an auspicious day on which to speak. It is a watershed not just for British Leyland but for myself as it happens to be my 40th birthday.

Will this debate solve anything? Will it answer any of the questions that have been posed? Will it merely build upon the synthetic indignation of the Opposition who see their role as embarrassing the Government, however much they may worry ordinary people in the process?

Is it because that chameleon the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) —a chameleon changes its colour to match its environment —came blustering around Chorley a week or so ago and was forced yet again to make commitments that he could not keep?

Do the Opposition have: any understanding of the concern of my constituents at the manner in which they raised questions in the House on Monday about my constituency without doing me the courtesy of informing me in advance? They asked questions concerning an issue which is not a secret in Leyland and Farington, which has been in the offing for some months and which management have openly admitted to trade union leaders was in process. The Opposition ought to be ashamed of themselves.

Here we are, however, and there are several points that I should like to make to the House and to my Front Bench about Leyland Vehicles, whose truck and bus division, which employs some 6,000 people, is centred in my constituency. Since 1983, during which time I have represented South Ribble, I have had the good fortune to be in regular contact with management and unions on the future of the truck and bus division. Indeed, I have led three delegations to Ministers to discuss problems, and will do so again this Friday. The trade unionists have taken great trouble to think about, to research into, and to discuss the difficulties, the options and the solutions as they see them. They have impressed me, and I know that they have impressed the Ministers that they have met, with their commitment and sense of responsibility.

I therefore urge my right hon. and hon. Friends on the Front Bench not to ignore or to talk at the trade unions. They should have a proper and detailed discussion with them and use their ideas. If I can do anything to help, I shall be more than pleased to do so and to facilitate meetings.

Secondly, is it any wonder that politicians get such a bad reputation when we open our mouths to make snap judgments before we know the facts? General Motors, Ford or Laird could be a good idea. They might not. We do not know. We should wait and see. Some people in Leyland Bus believe that, in the event of privatisation, Leyland Bus, being bigger than Laird, would be interested in taking that company over rather than the reverse. Is this just a simple expedient to rid the Government of the problems of Leyland Bus when there is such a decline in the United Kingdom market? Leyland Bus is the largest exporter of public service vehicles and has 90 years' experience. It has made a great contribution to the world's commercial vehicles. There is also the possibility of another offer. Has there been any consultation with Leyland Bus about its view of restructuring for the United Kingdom bus manufacturing market?

Thirdly, British Aerospace, which is the other large employer in my constituency, has been increasingly involved in collaboration and co-operation with the United States and Europe—and successfully. Why is there no possibility of doing the same with another vehicle manufacturer?

Fourthly, we must ensure continuity of design, research, testing and production and, of course, of jobs, where possible, subject to the need to sell vehicles worldwide at the right price and on time. I am grateful to my right hon. Friend the Secretary of State in his former incarnation as Minister of State for Trade and Industry for his help with the potential bus deal for Thailand, for which we still have high hopes. Bearing in mind Leyland's historic connections with Third world markets, will my right hon. Friend give his personal attention to better export finance support, soft loans and the rest?

Fifthly, can we be assured about the defence implications of any takeover in regard to vehicles for our armed forces?

Sixthly, bearing in mind the taxpayers' subvention to BL and our oft-stated commitment to wider share ownership, especially among employees, what steps are being taken to ensure that shares will be offered to the British public and to Leyland workers and that taxpayers' money will not be lost to a foreign company?

Seventhly, we must, as my hon. Friend the Member for Bromsgrove (Mr. Miller) said, end the uncertainty as soon as possible. It has been exacerbated by the antics of Opposition Members. My constituents and the potential purchasers of vehicles now do not know what to believe, and rumour and worries are beginning to mount.

The work force at Leyland Truck and Bus and my constituents are sick and tired of being the butt of second rate comedians and the subject of corny music hall jokes. They are decent hard-working professionals who have experienced a very hard time recently —a decline in world markets, lack of finance and Third world price cutting. Uncertainties caused by the Transport Act 1985 have not helped, although I believe that it will be beneficial in the long run.

Leyland Vehicles has an excellent product range, is building to high standards, and has increased and improved productivity, its design capability, its marketing strategy and product support. It has raised its share of the truck market from 15·1 per cent. last year to 16·5 per cent. this year. In the assembly plant and the test centre, it has facilities second to none. That is why General Motors wants it: it is a success story, arguably better than Bedford.

We should examine the facts and not make snap judgments or exaggerate the effects. Above all, I urge my right hon. Friend to ensure that those who have the deepest interest in these matters and who have given of their abilities over the years—those who work for Leyland Vehicles—have a future to look forward to, free from the uncertainty of the past few years, making trucks and buses that sell well and of which they can be justly proud.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham 6:55 pm, 5th February 1986

When, recently, several Conservative Members surged into the Chamber to listen to their ex-Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), I thought that they had come in to support him and to speak against the Atlanticism that is increasingly being identified with the Government. To judge from the warmth of their approval when he said that, if there is a problem in British Leyland, the remedy lies in collaborative agreements with Europe and not with the United States, I thought that the majority of the House supported this proposition.

The essential difference between General Motors and Ford and the European companies is that the former are European in terms of engineering but American in management. It is important to bear that in mind when considering the future of the British motor industry. It suits our industry to seek collaborative agreements with Europe rather than to have European engineering produced by American companies.

The Government have suggested that they favour a takeover of BL, not collaborative agreements. Surprisingly enough, they do not favour raising private capital as widely as possible either. The Bell Telephone solution for British Telecom would have been the logical conclusion of the Government's philosophy towards manufacturing industry. The Government talk about takeovers for manufacturing industry, but raising public capital for services.

Conservatives accuse Labour Members of indulging in protectionism. Socialists throughout the world understand that the only muscle available to them when bargaining with multinational companies is that afforded by import controls. The Labour party is about protectionism and import controls, because they provide negotiating muscle.

The trade unions are aware of the problems implicit in what Ford wants to do. It wants to take Austin Rover into volume production and out of competition with itself.

The trade unions are as keen as anyone to seek collaborative agreements that secure the future of industries and their members' jobs. I know of no trade union that is opposed to the four-wheel drive sector of Austin Rover contracting with Fiat for its engines to be fitted in Land Rover and other four-wheel drive vehicles.

It has been stated that the executive directors of Austin Rover are supposedly in agreement about the discussions. A week last Thursday I and some of my colleagues took part in a seminar with those executive directors about the future of the company. They made four announcements confirming that they would he in control of future production methods and were not dependent on agreements or takeovers. If the executive directors invited hon. Members to join in that seminar, and then, through duplicity or otherwise, misinformed them, I can only say that hon. Members will know how to answer any future invitations.

I must end my speech because of the constraints on time. The trade unions have a great deal more to say about this matter, especially about the effect on jobs. I hope that there will be an opportunity in the near future to make some of those points.

Photo of Mr David Madel Mr David Madel , South West Bedfordshire 7:02 pm, 5th February 1986

I am grateful to my right hon. Friend the Secretary of State for what he said about employees and employment in the truck industry in Bedfordshire. I want to deal, first, with the part of the amendment that refers to "satisfactory terms and conditions". Of supreme concern to my constituents are the details of any merger between General Motors and Leyland Trucks —something that will require careful scrutiny.

The merger talks have been taking place for many months, and I hope that they will soon be concluded. The endless uncertainty and worry about the talks is causing a great deal of concern in my constituency. When people make public statements about merger talks, they should not say anything that they know will merely cause more gloom and worry. As negotiations have not been concluded on the merger talks between General Motors and British Leyland, it is impossible now to guess the final outcome.

I remember that 11 years ago we went through a similar problem in Dunstable when the Chrysler company swayed on the brink of closure, with the possibility of severe job losses, Management, unions and the then Labour Government did their best to ensure that public statements were based on fact, not rumour. That restraint helped management and unions in the factory —which is now owned by Renault —to set the business back on a reasonable road.

Bedford Commercial Vehicles has been producing trucks in my constituency for more than 50 years. There has already been mention of what has been supplied for defence. The firm employs 2,400 people at its Dunstable plant, and more than half of what they have produced has been exported. Although the company is foreign-owned, local people believe that Bedford trucks and Vauxhall cars are as British as anything else that has had such long continuity of production in my constituency. Despite the serious slump in world truck business since 1980, the quality of Bedford trucks has been good, industrial relations have been good and there has been an increasing determination by management and unions to work together for the good of the company. That has not only helped the local community, but underpinned many local jobs.

The British content in Bedford trucks is vastly higher than it is in Vauxhall cars. Some statements this afternoon have not been based on fact. We should not compare the two because the use of British components is entirely different, depending on the product.

When the Government have the detailed proposals of the merger in front of them, I hope that they will bear in mind two points. First, the Government amendment refers to the need to provide the best prospects for secure long-term employment in the industry. That includes Bedfordshire. I say to those who are worried about the outcome of the discussions that it is General Motors' marketing and worldwide sales ability that can be — and I choose my words carefully—of great benefit to Leyland Trucks.

Secondly, I make the plea that if the nature of the work changes in the commercial vehicle plants, it is vital that the best retraining is undertaken and that the most modern equipment is introduced for changes in the work carried out.

We have previously had changes of ownership and merger talks in Dunstable. There will be no agreement on a merger unless there is maximum co-operation between management and the unions. The very least that we can do in this House is to lower the temperature. A confrontation and a blazing row, when nothing is yet settled, do absolutely nothing for the good of British industry; it simply causes immense distress and worry to my constituents and to others. We have a duty to those who work in the truck industry to do our best to ensure that there is maximum co-operation on job security.

Photo of Mr John Taylor Mr John Taylor , Solihull

On a point of order, Mr. Speaker.

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

Order. Is the hon. Gentleman rising because, sadly, he has not been called?

Photo of Mr John Taylor Mr John Taylor , Solihull

With 8,000 Land Rover workers in my constituency, I take it very badly that I have not been called.

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

I am terribly sorry. With the best will in the world, it is not possible to call everyone who wishes to speak. I did warn the House about that.

Photo of Mr Ronald Lewis Mr Ronald Lewis , Carlisle

Further to that point of order, Mr. Speaker. Does not the fault lie with the Government, who have created a lack of time by putting forward two statements today that everyone knew would lead to lengthy questions?

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

That is a contributory factor. However, when the Front-Bench spokesman rises, there is really nothing that I can do other than to call him.

Photo of Mr Terry Davis Mr Terry Davis , Birmingham, Hodge Hill 7:07 pm, 5th February 1986

I shall not stoop to respond to the charges of the Secretary of State for Trade and Industry about anti-Americanism on the Opposition Benches. No one who knows my education and employment record would dare to suggest that I am anti-American. Nor will I stoop to deal with the right hon. Gentleman's suggestion that my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) denigrated General Motors, Vauxhall and the Ford Motor Company. The best that can be said about the Secretary of State is that he clearly wrote that part of his speech before he listened to my right hon. and learned Friend.

One thing I will tell the Secretary of State is that I learnt, both as a student and as an employee of both British and American manufacturers, that the Americans do not respect doormats. That is what the debate is about—it is whether British industry and the British Government are to be doormats for the American multinationals.

I agree with the Secretary of State on one point—we are debating a central part of British manufacturing industry. It is appalling that we should be debating such an important matter, which affects the livelihood of more than 500,000 people, in less than three hours. I hope that those Conservative Members who are complaining about inadequate time will press for a further debate in Government time.

We have been trying to debate three sectors of the motor manufacturing industry. I shall deal first and briefly —more briefly than I would wish —with the bus industry. I know that my hon. Friend the Member for Workington (Mr. Campbell-Savours) was as disappointed at not catching your eye, Mr. Speaker, as those Conservative Members who have already protested. We are both concerned about the proposed merger between Metro Cammell Weymann, which is in my constituency, and the Leyland bus division. The bus market is flat. It has been decimated by the Government's policies. Anyone who visits the customers of bus manufacturers will be told that they are not buying buses because of the Government's policies. For the Government to visit the problems of that industry, which they have caused, on the people who work in the industry is a clear indictment of their own policies. My hon. Friend the Member for Workington and I naturally fear that a single merged bus company producing the same number of buses, with overcapacity in the industry, will mean redundancies. They will be in either Birmingham or Workington, and that is why we are concerned about the merger. We need to see the terms and receive clear assurances on that point.

Another point affects both the bus companies and the passengers of bus companies. It has always been a matter of concern to the people who buy buses in Britain that there should be two sources to give them the opportunity to choose between companies. The Government's proposals, and their pressure on the Laird group and the Leyland bus division, will create a single monopoly source for buses.

The second sector of concern is the truck market. As we know, the truck market collapsed two or three years ago, but the Leyland trucks division now has a good model range and excellent production facilities as a result of public investment. The Leyland trucks division is now poised to take advantage of an upturn in the market. That is why General Motors is interested in it. General Motors took the decision two or three years ago that it would concentrate on the heavy truck market. It picked the Leyland trucks division as an acquisition. I am sure that General Motors came knocking on the door because it recognised the value of the Leyland facilities, which have been built with public money, and from which it wishes to get the profits.

Again, the question needs to be asked: what will happen to the jobs of those who work not only in Leyland truck division, but also in the factories in Dunstable and elsewhere in General Motors. What will happen to the jobs in Lancashire, Birmingham, Dunstable and Luton? We need to be told.

The Secretary of State told us on Monday, and repeated today, that he would expect undertakings to be given by General Motors. He said on Monday that General Motors is willing to give undertakings that the majority of products sold by the businesses involved will be manufactured in the United Kingdom. What majority will that be? Will it be the same proportion as are manufactured today, or a smaller or larger proportion? We should be told before we decide whether to approve the takeover.

The Secretary of State told us that products will continue to have a high local content. Is he saying that about General Motors, which has been criticised by his predecessor for having less than 50 per cent. local content?

Photo of Mr Terry Davis Mr Terry Davis , Birmingham, Hodge Hill

The hon. Gentleman may not agree with what the previous Secretary of State said, but he said it at the Dispatch Box only four months ago. He criticised General Motors for having the worst record on local content and local manufacture of any of the three big manufacturers. Will we have the same amount of local content if it takes over Leyland truck division? We need answers.

Photo of Mr Terry Davis Mr Terry Davis , Birmingham, Hodge Hill

I shall not give way to the hon. Gentleman, because he does not know the answers.

The Secretary of State then said that there will be a substantial level of exports, but what exports? The same substantial level that we have at the moment—to the same market? That is another crucial point. The allocation of markets will depend on the decisions taken in Pontiac, Michigan, not in the United Kingdom. A subsidiary company of an American manufacturer is not allowed to sell abroad unless it has been given that right. That is a crucial point, on which we shall want much more specific undertakings than the Secretary of State seems to require.

The Secretary of State told us that he has an undertaking that research and development facilities will be maintained in the United Kingdom. What research and development facilities has General Motors in the United Kingdom at the moment? Our understanding is that it is all done in Germany. For how long would research and development be continued in this country?

The Secretary of State then told us that General Motors would undertake "appropriate" levels of investment. We have heard that before. We might have different views of what is an appropriate level of investment in the truck business in Britain. The Secretary of State has not given us any undertakings from his lords and masters at General Motors about jobs in the United Kingdom. There was nothing in his list on Monday or today about assurances for employment in the United Kingdom nor about assurances that all the factories will continue to exist in the United Kingdom, such as the truck factories at Preston, Dunstable and elsewhere.

We have been through this before, as the right hon. Member for Old Bexley and Sidcup (Mr. Heath) reminded us, with Chrysler. It gave undertakings and assurances, accepted by Conservative as well as Labour Governments. Those assurances were not worth the paper on which they were written. When the crunch came, Chrysler tore up those agreements and ignored them, and the British Government were faced with the alternatives of accepting total closure or capitulating to slightly lesser demands.

We expect a clear statement from the Secretary of State for Trade and Industry at the end of these discussions. I accept his assurance today that no decision has been taken, but the Opposition require that there is a proper debate after a full statement by the Government, preferably in a White Paper, so that we can see and test just what undertakings are being given by this multinational company. We expect that debate in Government time.

Another multinational involved in this debate is Ford. It is not setting its sights on the truck business. On the contrary, it is in the process of selling its truck business and is just selling its plant in the United Kingdom. The plant at Langley, which is manufacturing heavy trucks, will be sold to Iveco. The decision by Ford has been to dominate not the truck market but the car market. It has set its sights on increasing its share of the United Kingdom market from 26 per cent. to 44 per cent. It has decided —I do not criticise its interests—that it wants to be not the market leader but the market dominator. It is entitled to take that decision, but we are equally entitled to say that we shall not aid and abet it.

The Secretary of State said that the initiative came from Ford. I am concerned about the words that he used. There were no discussions with Ford until the Fiat talks had collapsed. The talks with Fiat collapsed because the Italians and the Americans could not agree about control, and control is at the centre of the debate. After the talks collapsed in November, I do not believe that Ford came knocking on the door. The Secretary of State said not that that had happened, but that he was approached. From the information that I have been given, the fact is that the door was opened already and the company was beckoned inside by the British Government. The Department of Trade and Industry was asking Ford to look at Austin Rover.

From Ford's point of view, a takeover of Austin Rover does not make sense. A merger between Ford and Fiat might make sense because they have complementary ranges, but Ford and Austin Rover have competitive ranges and competitive products competing in the same markets. It does not make sense for Ford to take over Austin Rover unless it wants to close some production facilities. Ford is buying market share. It will not want extra factories. The president of Ford Europe has told the world that there is over-capacity in motor manufacturing in Europe. The company has four factories in Europe—one each at Cologne, Valencia, Dagenham and Halewood. It is stretching our credulity to the limit to ask us to believe that Ford knocked on the Government's door and said that it wanted to take over two more factories at Longbridge and Cowley. I do not believe it. If Ford takes over Austin Rover, there will be both job losses and closures of factories. It will not maintain all four factories in the United Kingdom. It does not need those four factories in the United Kingdom. Where will the jobs go? Will they go at Dagenham, Halewood. Longbridge in Birmingham or Cowley in Oxford? We should be told.

I am not suggesting that the jobs will be lost before the general election, but after it. We want to know when and where they will be lost before the general election.

Ford also has a little research and development in Dunton in Essex. Research and development and design should not be shrugged off by the Secretary of State for Trade and Industry, because they are critical for the retention of manufacturing industry. We are not simply making a nationalistic point. Technology, experience and skills are transferred from industry to industry. Just as the motor industry is applying techniques that were learnt in the aerospace industry, so the same techniques will cross the boundaries between industries into our remaining engineering and manufacturing industries. We want those techniques because otherwise we shall be left with unskilled work, which means opportunities only for an unskilled work force.

Already the Society of Motor Manufacturers and Traders is complaining about reductions in scientific research. What is the point of increasing scientific research, if we do not have research and development to apply the fruits of that research? And proximity to design is essential for a component manufacturer. If we do not retain the design of motor cars, the future is bleak for Lucas, GKN and all the small component manufacturers. We are considering more than 500,000 jobs at Austin Rover, Ford and in component manufacturing.

So far, jobs in the dealer network have not been mentioned. What will happen to Austin Rover dealers, and all the small business men who vote Conservative? If Ford took over Austin Rover, it would have two dealers networks selling competitive ranges. Ford would not keep them both. It began the cuts in dealerships in the 1960s, followed by Chrysler, British Leyland and General Motors. Ford let the importers in by freeing the dealers to import French, German and Italian cars. Will they repeat a previous mistake?

On a similar point, what will happen to the Austin Rover dealers who have been selling Sherpa vans? In too quick a response, the Secretary of State said that Freight Rover would go to General Motors. If it does, from where will Austin Rover dealers get their vans? If the Government tell us that they can get the Sherpa vans from General Motors, who will make them in future, why cannot General Motors get Land Rovers from British Leyland and sell them in that way in the United States?

We do not need a takeover, an acquisition or a merger to expand and extend British motor manufacturing industry. The heart of the matter is: who will take the decisions about who has the markets? Who will decide where production takes place, and whose cars are sold abroad? American control means that the American parent company, the American multinational motor manufacturer, will take decisions about British subsidiaries. What will happen to the sales of Land Rover abroad? Are we being asked to believe that the American Government win not tell General Motors not to sell Land Rover to Libya? Of course they will. But the point is not whether Land Rovers should be sold to Libya or South Africa, but where the decisions should be taken; and they should not be made in Michigan.

The Ford and Fiat deal fell through because the Italians would not accept American control. That has been openly admitted. Why then will our Government accept American control?

We are not talking about privatisation, or the links that the Secretary of State mentioned, or collaboration. He twitted my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) by saying that the Labour party advocated collaboration. We do, but this is not collaboration. It is a takeover. This is not a link, but an old-fashioned merger which will give the United States control. That is why we object.

And what about the effect on Honda? Austin Rover has a collaboration agreement with Honda. Who has talked to Honda about that? I understand that that agreement includes a clause which allows Honda to withdraw from collaboration with Austin Rover, if any talks take place about a merger of Austin Rover with any other motor manufacturer. Who checked that Honda would not cancel its collaboration with British Leyland? Will the new Rover XX be the last of that line?

Then we come to the real issue. While the British Government were publishing the British Leyland corporate plan six months ago and talking about collaboration with Honda in public, they were talking to American motor manufacturers in private about takeovers. Once again, the second time since Christmas, we have a clear example of the Government pursuing one policy in public and another in private.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester 7:25 pm, 5th February 1986

The right hon. and learned Member for Monklands, East (Mr. Smith) said that he thought the debate would be angry. There have been strong feelings and emotions, but no anger. I understand those strong feelings and emotions, because we are discussing the future of part of the British vehicle industry, which employs tens of thousands of people and affects many others.

It is surprising that some hon. Members apparently want to stop the world. Would that we could. It would be easier for the Government, but we cannot. I am not a pessimist—that has been imputed to some members of the Government—about the car industry, provided that we look ahead. I agree with my hon. Friend the Member for Bromsgrove (Mr. Miller) that any delay will be damaging.

The question that we must address is: can or should BL continue as it is, whether in public or private ownership? I believe that it cannot do so. Even if it could, it should not, because in today's world standing still means dropping backwards. Despite its progress, it is a small company exposed on the world stage. If it continues as it is, there will be a risk that it will slowly but surely expose taxpayers to even greater potential liabilities, with no certainty of success.

Many customers want to buy British, as they have done with Ford for 75 years, Vauxhall for 83 years and Bedford for 55 years. I listened carefully to my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), who was worried that the profits of General Motors would return to the United States. During the past decade GM has invested more than £1,200 million in the United Kingdom, including trading losses of £370 million. That is the record of a company which is committed to the United Kingdom. Ford has invested more than £1,000 million during the past five years, which is more than £100 million more than the profits generated. Of the profits generated, it has paid £450 million in tax to the United Kingdom. In both cases—five years and 10 years—their record is good.

GM and Ford employ about 80,000 people —a significant number. The Opposition's remarks were amazing. Whether we like it or not, difficult decisions must now be made. I know that my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), who has not been called to speak, feels strongly about these matters. If we miss our chance, we could be throwing away a golden opportunity to build on the foundations that have been laid. If we do not build on those foundations, we may never build.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

I shall not give way.

I cannot see what is wrong with a potential foreign partnership and ownership. We make investments in the United States, and I should have thought that we would welcome United States' investments in the United Kingdom, because they secure jobs, bring jobs and create exports.

There are three separate issues. My hon. Friend the Member for South Ribble (Mr. Atkins) referred to Leyland Buses and to Leyland Trucks. I agree with his comments about the unions. I have seen the unions, and I know that they take a constructive view. My hon. Friend will be aware that the BL board supported the current discussions with the Laird group.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

Last year, Leyland Trucks suffered substantial losses, although the losses were less than in 1984. It has negative cash flows, and market conditions remain difficult. Freight Rover and Land Rover are perceived as being highly profitable, but they are not as profitable as some would have us believe. Leyland Trucks has been going through difficult times. If the divisions are to grow and realise their substantial potential, they must generate sufficient profits to sustain the heavy investment required nowadays to launch new models and remain abreast of the competition.

Photo of Hon. Peter Morrison Hon. Peter Morrison , City of Chester

I am coming to my hon. Friend's point. If General Motors' offer goes ahead, the British companies will have the benefits of financial strength, enormous experience of resources and technical back-up as new products are developed. As some of my colleagues have pointed out, the British companies will have worldwide marketing outlets and a large market in the United States, which has not, to date, been available to them. The potential of the new jobs that could be created at Solihull, if Land Rover and Range Rover can be sold in volume in the United States, is significant. I apologise to my hon. Friend the member for Solihull (Mr. Taylor) for not giving Way. I knew that I was getting to the point which I think he wanted me to raise.

As my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) pointed out, We are prepared to look at any option with respect to Austin Rover. We are not prepared to hawk Austin Rover around the market place. We have a proposal and options which the Labour party say we should not even explore. I should have thought that, With ARG having a market Share in Europe of only 3·9 percent., and with Ford being a company with one of the most comprehensive sales and distribution networks in Europe, that must be the route to consider.

The Opposition argue that we should say to Ford, "Go away. We are not interested in finding out the facts or ascertaining whether there will be an industrial and commercial benefit." That simply does not add up. The Labour party will go on regardless, paying taxpayers' money into the company. We now know that the Labour is totally anti-American. At this stage, we should negotiate as best we can.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 195, Noes 324.

Division No. 61][7.35 pm
Adams, Allen (Paisley N)Dalyell, Tam
Anderson, DonaldDavies, Rt Hon Denzil (L'lli)
Archer, Rt Hon PeterDavis, Terry (B'ham, H'ge H'l)
Ashley, Rt Hon JackDeakins, Eric
Ashton, JoeDewar, Donald
Atkinson, N. (Tottenham)Dixon, Donald
Banks, Tony (Newham NW)Dobson, Frank
Barnett, GuyDormand, Jack
Barron, KevinDouglas, Dick
Beckett, Mrs MargaretDubs, Alfred
Bell, StuartDuffy, A. E. P.
Benn, Rt Hon TonyDunwoody, Hon Mrs G.
Bermingham, GeraldEadie, Alex
Blair, AnthonyEastham, Ken
Boothroyd, Miss BettyEdwards, Bob (W'h'mpt'n SE)
Boyes, RolandEvans, John (St. Helens N)
Bray, Dr JeremyEwing, Harry
Brown, Gordon (D'f'mline E)Fatchett, Derek
Brown, Hugh D. (Provan)Faulds, Andrew
Brown, N. (N'c'tle-u-Tyne E)Field, Frank (Birkenhead)
Brown, R. (N'c'tle-u-Tyne N)Fields, T. (L'pool Broad Gn)
Brown, Ron (E'burgh, Leith)Fisher, Mark
Buchan, NormanFlannery, Martin
Caborn, RichardFoot, Rt Hon Michael
Callaghan, Rt Hon J.Forrester, John
Callaghan, Jim (Heyw'd & M)Foster, Derek
Campbell, IanFoulkes, George
Campbell-Savours, DaleFraser, J. (Norwood)
Canavan, DennisFreeson, Rt Hon Reginald
Carter-Jones, LewisGarrett, W. E.
Clark, Dr David (S Shields)George, Bruce
Clarke, ThomasGilbert, Rt Hon Dr John
Clay, RobertGodman, Dr Norman
Clelland, David GordonGould, Bryan
Clwyd, Mrs AnnGourlay, Harry
Cocks, Rt Hon M. (Bristol S)Hamilton, James (M'well N)
Cohen, HarryHamilton, W. W. (Fife Central)
Coleman, DonaldHardy, Peter
Conlan, BernardHarman, Ms Harriet
Cook, Frank (Stockton North)Harrison, Rt Hon Walter
Cook, Robin F. (Livingston)Hart, Rt Hon Dame Judith
Corbett, RobinHattersley, Rt Hon Roy
Corbyn, JeremyHaynes, Frank
Cox, Thomas (Tooting)Healey, Rt Hon Denis
Craigen, J. M.Heffer, Eric S.
Crowther, StanHogg, N. (C'nauld & Kilsyth)
Cunliffe, LawrenceHome Robertson, John
Cunningham, Dr JohnHowell, Rt Hon D. (S'heath)
Howells, GeraintPrescott, John
Hoyle, DouglasRadice, Giles
Hughes, Dr Mark (Durham)Randall, Stuart
Hughes, Robert (Aberdeen N)Redmond, Martin
Hughes, Roy (Newport East)Rees, Rt Hon M. (Leeds S)
Hughes, Sean (Knowsley S)Richardson, Ms Jo
Janner, Hon GrevilleRoberts, Allan (Bootle)
John, BrynmorRoberts, Ernest (Hackney N)
Kaufman, Rt Hon GeraldRobertson, George
Kilroy-Silk, RobertRobinson, G. (Coventry NW)
Kinnock, Rt Hon NeilRogers, Allan
Lambie, DavidRooker, J. W.
Lamond, JamesRoss, Ernest (Dundee W)
Leighton, RonaldRyman, John
Lewis, Ron (Carlisle)Sedgemore, Brian
Lewis, Terence (Worsley)Sheerman, Barry
Litherland, RobertSheldon, Rt Hon R.
Lloyd, Tony (Stretford)Shore, Rt Hon Peter
Loyden, EdwardShort, Ms Clare (Ladywood)
McCartney, HughShort, Mrs R.(W'hampt'n NE)
McDonald, Dr OonaghSilkin, Rt Hon J.
McGuire, MichaelSkinner, Dennis
McKelvey, WilliamSmith, C.(Isl'ton S & F'bury)
MacKenzie, Rt Hon GregorSmith, Rt Hon J. (M'ds E)
McNamara, KevinSnape, Peter
McTaggart, RobertSoley, Clive
McWilliam, JohnSpearing, Nigel
Madden, MaxStewart, Rt Hon D. (W Isles)
Marek, Dr JohnStott, Roger
Martin, MichaelStrang, Gavin
Mason, Rt Hon RoyThomas, Dafydd (Merioneth)
Maxton, JohnThomas, Dr R. (Carmarthen)
Maynard, Miss JoanThompson, J. (Wansbeck)
Meacher, MichaelThorne, Stan (Preston)
Michie, WilliamTinn, James
Millan, Rt Hon BruceTorney, Tom
Miller, Dr M. S. (E Kilbride)Wardell, Gareth (Gower)
Mitchell, Austin (G't Grimsby)Wareing, Robert
Moore, Rt Hon JohnWeetch, Ken
Morris, Rt Hon A. (W'shawe)Welsh, Michael
Nellist, DavidWhite, James
Oakes, Rt Hon GordonWigley, Dafydd
O'Brien, WilliamWilliams, Rt Hon A.
O'Neill, MartinWilson, Gordon
Orme, Rt Hon StanleyWinnick, David
Park, GeorgeWoodall, Alec
Parry, RobertYoung, David (Bolton SE)
Patchett, Terry
Pavitt, LaurieTellers for the Ayes:
Pendry, TomMr. Allen McKay and
Pike, PeterMr. Ron Davies.
Powell, Raymond (Ogmore)
Adley, RobertBody, Sir Richard
Aitken, JonathanBonsor, Sir Nicholas
Alexander, RichardBottomley, Peter
Alison, Rt Hon MichaelBottomley, Mrs Virginia
Amery, Rt Hon JulianBowden, A. (Brighton K'to'n)
Amess, DavidBowden, Gerald (Dulwich)
Ancram, MichaelBoyson, Dr Rhodes
Arnold, TomBraine, Rt Hon Sir Bernard
Ashby, DavidBrandon-Bravo, Martin
Aspinwall, JackBrinton, Tim
Atkins, Rt Hon Sir H.Brooke, Hon Peter
Atkins, Robert (South Ribble)Brown, M. (Brigg & Cl'thpes)
Atkinson, David (B'm'th E)Browne, John
Baker, Rt Hon K. (Mole Vall'y)Bruinvels, Peter
Baker, Nicholas (Dorset N)Bryan, Sir Paul
Baldry, TonyBuchanan-Smith, Rt Hon A.
Batiste, SpencerBuck, Sir Antony
Bellingham, HenryBudgen, Nick
Bendall, VivianBulmer, Esmond
Bennett, Rt Hon Sir FredericBurt, Alistair
Benyon, WilliamButcher, John
Best, KeithButler, Rt Hon Sir Adam
Biffen, Rt Hon JohnButterfill, John
Biggs-Davison, Sir JohnCarlisle, John (Luton N)
Blackburn, JohnCarlisle, Kenneth (Lincoln)
Blaker, Rt Hon Sir PeterCarlisle, Rt Hon M. (W'ton S)
Cash, WilliamHirst, Michael
Channon, Rt Hon PaulHolland, Sir Philip (Gedling)
Chapman, SydneyHolt, Richard
Chope, ChristopherHordern, Sir Peter
Churchill, W. S.Howard, Michael
Clark, Sir W. (Croydon S)Howarth, Alan (Stratf'd-on-A)
Clarke, Rt Hon K. (Rushcliffe)Howe, Rt Hon Sir Geoffrey
Clegg, Sir WalterHowell, Rt Hon D. (G'ldford)
Cockeram, EricHowell, Ralph (Norfolk, N)
Conway, DerekHubbard-Miles, Peter
Coombs, SimonHunt, David (Wirral W)
Cope, JohnHunt, John (Ravensbourne)
Corrie, JohnHurd, Rt Hon Douglas
Couchman, JamesIrving, Charles
Cranborne, ViscountJenkin, Rt Hon Patrick
Crouch, DavidJessel, Toby
Currie, Mrs EdwinaJohnson Smith, Sir Geoffrey
Dickens, GeoffreyJones, Gwilym (Cardiff N)
Dorrell, StephenJones, Robert (Herts W)
du Cann, Rt Hon Sir EdwardJopling, Rt Hon Michael
Dunn, RobertKellett-Bowman, Mrs Elaine
Durant, TonyKey, Robert
Dykes, HughKing, Rt Hon Tom
Edwards, Rt Hon N. (P'broke)Knowles, Michael
Eggar, TimKnox, David
Evennett, DavidLamont, Norman
Fairbairn, NicholasLang, Ian
Fallon, MichaelLatham, Michael
Favell, AnthonyLawler, Geoffrey
Fenner, Mrs PeggyLawrence, Ivan
Finsberg, Sir GeoffreyLawson, Rt Hon Nigel
Fletcher, AlexanderLee, John (Pendle)
Fookes, Miss JanetLeigh, Edward (Gainsbor'gh)
Forman, NigelLennox-Boyd, Hon Mark
Forsyth, Michael (Stirling)Lewis, Sir Kenneth (Stamf'd)
Forth, EricLightbown, David
Fowler, Rt Hon NormanLilley, Peter
Fox, MarcusLloyd, Peter (Fareham)
Franks, CecilLord, Michael
Fraser, Peter (Angus East)Luce, Rt Hon Richard
Freeman, RogerLyell, Nicholas
Gale, RogerMcCrindle, Robert
Galley, RoyMcCurley, Mrs Anna
Gardiner, George (Reigate)Macfarlane, Neil
Gardner, Sir Edward (Fylde)MacGregor, Rt Hon John
Garel-Jones, TristanMacKay, Andrew (Berkshire)
Gilmour, Rt Hon Sir IanMacKay, John (Argyll & Bute)
Glyn, Dr AlanMaclean, David John
Goodhart, Sir PhilipMcNair-Wilson, M. (N'bury)
Gorst, JohnMcNair-Wilson, P. (New F'st)
Gow, IanMcQuarrie, Albert
Gower, Sir RaymondMadel, David
Grant, Sir AnthonyMajor, John
Gregory, ConalMalins, Humfrey
Griffiths, Sir EldonMalone, Gerald
Griffiths, Peter (Portsm'th N)Maples, John
Grist, IanMarland, Paul
Ground, PatrickMarlow, Antony
Grylls, MichaelMarshall, Michael (Arundel)
Gummer, Rt Hon John SMates, Michael
Hamilton, Hon A. (Epsom)Maude, Hon Francis
Hamilton, Neil (Tatton)Mawhinney, Dr Brian
Hampson, Dr KeithMaxwell-Hyslop, Robin
Hanley, JeremyMellor, David
Hannam, JohnMerchant, Piers
Hargreaves, KennethMeyer, Sir Anthony
Harris, DavidMiller, Hal (B'grove)
Haselhurst, AlanMills, Iain (Meriden)
Hawksley, WarrenMills, Sir Peter (West Devon)
Hayes, J.Miscampbell, Norman
Hayhoe, Rt Hon BarneyMitchell, David (Hants NW)
Hayward, RobertMoate, Roger
Heathcoat-Amory, DavidMonro, Sir Hector
Henderson, BarryMontgomery, Sir Fergus
Heseltine, Rt Hon MichaelMoore, Rt Hon John
Hickmet, RichardMorris, M. (N'hampton S)
Hicks, RobertMorrison, Hon C. (Devizes)
Higgins, Rt Hon Terence L.Morrison, Hon P. (Chester)
Hill, JamesMurphy, Christopher
Hind, KennethNeale, Gerrard
Nelson, AnthonySpeller, Tony
Neubert, MichaelSpence, John
Newton, TonySpencer, Derek
Nicholls, PatrickSpicer, Jim (Dorset W)
Norris, StevenSpicer, Michael (S Worcs)
Oppenheim, PhillipSquire, Robin
Oppenheim, Rt Hon Mrs S.Stanley, Rt Hon John
Osborn, Sir JohnStern, Michael
Ottaway, RichardStewart, Allan (Eastwood)
Page, Sir John (Harrow W)Stewart, Ian (Hertf'dshire N)
Page, Richard (Herts SW)Stokes, John
Parkinson, Rt Hon CecilStradling Thomas, Sir John
Parris, MatthewTaylor, John (Solihull)
Patten, J. (Oxf W & Abgdn)Taylor, Teddy (S'end E)
Percival, Rt Hon Sir IanTemple-Morris, Peter
Pollock, AlexanderTerlezki, Stefan
Porter, BarryThatcher, Rt Hon Mrs M.
Powell, Rt Hon J. E.Thomas, Rt Hon Peter
Powell, William (Corby)Thompson, Donald (Calder V)
Powley, JohnThompson, Patrick (N'ich N)
Prentice, Rt Hon RegThorne, Neil (Ilford S)
Price, Sir DavidThornton, Malcolm
Prior, Rt Hon JamesThurnham, Peter
Proctor, K. HarveyTownend, John (Bridlington)
Pym, Rt Hon FrancisTownsend, Cyril D. (B'heath)
Raffan, KeithTracey, Richard
Rathbone, TimTrippier, David
Rees, Rt Hon Peter (Dover)van Straubenzee, Sir W.
Renton, TimVaughan, Sir Gerard
Rhodes James, RobertViggers, Peter
Ridley, Rt Hon NicholasWaddington, David
Ridsdale, Sir JulianWakeham, Rt Hon John
Rifkind, Rt Hon MalcolmWaldegrave, Hon William
Rippon, Rt Hon GeoffreyWalden, George
Roberts, Wyn (Conwy)Walker, Bill (T'side N)
Robinson, Mark (N'port W)Waller, Gary
Roe, Mrs MarionWalters, Dennis
Rossi, Sir HughWard, John
Rowe, AndrewWardle, C. (Bexhill)
Rumbold, Mrs AngelaWarren, Kenneth
Ryder, RichardWatts, John
Sackville, Hon ThomasWells, Bowen (Hertford)
Sainsbury, Hon TimothyWells, Sir John (Maidstone)
St. John-Stevas, Rt Hon N.Wheeler, John
Sayeed, JonathanWhitfield, John
Scott, NicholasWhitney, Raymond
Shaw, Giles (Pudsey)Wiggin, Jerry
Shaw, Sir Michael (Scarb')Wilkinson, John
Shelton, William (Streatham)Wolfson, Mark
Shepherd, Colin (Hereford)Wood, Timothy
Shepherd, Richard (Aldridge)Woodcock, Michael
Silvester, FredYeo, Tim
Sims, RogerYoung, Sir George (Acton)
Skeet, Sir TrevorYounger, Rt Hon George
Smith, Sir Dudley (Warwick)
Smith, Tim (Beaconsfield)Tellers for the Noes:
Soames, Hon NicholasMr. Carol Mather and
Speed, KeithMr. Robert Boscawen.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on Amendments):

The House divided: Ayes 297, Noes 211.

Division No. 62][7.48 pm
Aitken, JonathanAtkinson, David (B'm'th E)
Alexander, RichardBaker, Rt Hon K. (Mole Vall'y)
Alison, Rt Hon MichaelBaker, Nicholas (Dorset N)
Amery, Rt Hon JulianBaldry, Tony
Amess, DavidBatiste, Spencer
Ancram, MichaelBellingham, Henry
Arnold, TomBendall, Vivian
Ashby, DavidBennett, Rt Hon Sir Frederic
Aspinwall, JackBest, Keith
Atkins, Rt Hon Sir H.Biffen, Rt Hon John
Atkins, Robert (South Ribble)Biggs-Davison, Sir John
Blackburn, JohnHamilton, Hon A. (Epsom)
Blaker, Rt Hon Sir PeterHamilton, Neil (Tatton)
Body, Sir RichardHanley, Jeremy
Bonsor, Sir NicholasHannam, John
Bottomley, Mrs VirginiaHargreaves, Kenneth
Bowden, A. (Brighton K'to'n)Harris, David
Bowden, Gerald (Dulwich)Haselhurst, Alan
Boyson, Dr RhodesHayes, J.
Braine, Rt Hon Sir BernardHayhoe, Rt Hon Barney
Brandon-Bravo, MartinHayward, Robert
Brinton, TimHeathcoat-Amory, David
Brooke, Hon PeterHenderson, Barry
Brown, M. (Brigg & Cl'thpes)Hickmet, Richard
Browne, JohnHicks, Robert
Bruinvels, PeterHiggins, Rt Hon Terence L.
Bryan, Sir PaulHill, James
Buchanan-Smith, Rt Hon A.Hind, Kenneth
Buck, Sir AntonyHirst, Michael
Budgen, NickHolland, Sir Philip (Gedling)
Burt, AlistairHolt, Richard
Butcher, JohnHordern, Sir Peter
Butler, Rt Hon Sir AdamHowarth, Alan (Stratf'd-on-A)
Butterfill, JohnHowe, Rt Hon Sir Geoffrey
Carlisle, John (Luton N)Howell, Rt Hon D. (G'ldford)
Carlisle, Kenneth (Lincoln)Howell, Ralph (Norfolk, N)
Carlisle, Rt Hon M. (W'ton S)Hubbard-Miles, Peter
Cash, WilliamHunt, David (Wirral W)
Channon, Rt Hon PaulHunt, John (Ravensbourne)
Chapman, SydneyHurd, Rt Hon Douglas
Chope, ChristopherJenkin, Rt Hon Patrick
Churchill, W. S.Jessel, Toby
Clark, Sir W. (Croydon S)Johnson Smith, Sir Geoffrey
Clarke, Rt Hon K. (Rushcliffe)Jones, Gwilym (Cardiff N)
Clegg, Sir WalterJones, Robert (Herts W)
Cockeram, EricJopling, Rt Hon Michael
Conway, DerekKellett-Bowman, Mrs Elaine
Coombs, SimonKey, Robert
Cope, JohnKing, Rt Hon Tom
Corrie, JohnKnowles, Michael
Couchman, JamesKnox, David
Cranborne, ViscountLamont, Norman
Currie, Mrs EdwinaLang, Ian
Dickens, GeoffreyLatham, Michael
Dorrell, StephenLawler, Geoffrey
du Cann, Rt Hon Sir EdwardLawrence, Ivan
Dunn, RobertLawson, Rt Hon Nigel
Durant, TonyLee John (Pendle)
Edwards, Rt Hon N. (P'broke)Leigh, Edward (Gainsbor'gh)
Eggar, TimLennox-Boyd, Hon Mark
Evennett, DavidLewis, Sir Kenneth (Stamf'd)
Fairbairn, NicholasLightbown, David
Fallon, MichaelLilley, Peter
Finsberg, Sir GeoffreyLloyd, Peter (Fareham)
Fletcher, AlexanderLord, Michael
Fookes, Miss JanetLuce, Rt Hon Richard
Forman, NigelLyell, Nicholas
Forsyth, Michael (Stirling)McCrindle, Robert
Forth, EricMacfarlane, Neil
Fowler, Rt Hon NormanMacGregor, Rt Hon John
Fox, MarcusMacKay, Andrew (Berkshire)
Franks, CecilMacKay, John (Argyll & Bute)
Fraser, Peter (Angus East)Maclean, David John
Freeman, RogerMcNair-Wilson, M. (N'bury)
Gale, RogerMcNair-Wilson, P. (New F'st)
Galley, RoyMcQuarrie, Albert
Gardiner, George (Reigate)Madel, David
Gardner, Sir Edward (Fylde)Major, John
Garel-Jones, TristanMalins, Humfrey
Glyn, Dr AlanMalone, Gerald
Goodhart, Sir PhilipMaples, John
Gorst, JohnMarland, Paul
Gow, IanMarshall, Michael (Arundel)
Gower, Sir RaymondMates, Michael
Grant, Sir AnthonyMaude, Hon Francis
Gregory, ConalMawhinney, Dr Brian
Griffiths, Sir EldonMaxwell-Hyslop, Robin
Griffiths, Peter (Portsm'th N)Mayhew, Sir Patrick
Grist, IanMellor, David
Ground, PatrickMerchant, Piers
Gummer, Rt Hon John SMeyer, Sir Anthony
Miller, Hal (B'grove)Smith, Tim (Beaconsfield)
Mills, Sir Peter (West Devon)Soames, Hon Nicholas
Mitchell, David (Hants NW)Speed, Keith
Moate, RogerSpeller, Tony
Monro, Sir HectorSpence, John
Montgomery, Sir FergusSpencer, Derek
Moore, Rt Hon JohnSpicer, Jim (Dorset W)
Morris, M. (N'hampton S)Spicer, Michael (S Worcs)
Morrison, Hon P. (Chester)Squire, Robin
Murphy, ChristopherStanley, Rt Hon John
Neale, GerrardSteen, Anthony
Nelson, AnthonyStern, Michael
Neubert, MichaelStewart, Allan (Eastwood)
Newton, TonyStewart, Ian (Hertf'dshire N)
Nicholls, PatrickStokes, John
Norris, StevenStradling Thomas, Sir John
Oppenheim, PhillipTaylor, Teddy (S'end E)
Oppenheim, Rt Hon Mrs S.Temple-Morris, Peter
Ottaway, RichardTerlezki, Stefan
Page, Sir John (Harrow W)Thatcher, Rt Hon Mrs M.
Page, Richard (Herts SW)Thomas, Rt Hon Peter
Parkinson, Rt Hon CecilThompson, Donald (Calder V)
Parris, MatthewThompson, Patrick (N'ich N)
Patten, J. (Oxf W & Abgdn)Thorne, Neil (Ilford S)
Percival, Rt Hon Sir IanThornton, Malcolm
Pollock, AlexanderThurnham, Peter
Porter, BarryTownend, John (Bridlington)
Powell, William (Corby)Townsend, Cyril D. (B'heath)
Powley, JohnTracey, Richard
Prentice, Rt Hon RegTrippier, David
Prior, Rt Hon Jamesvan Straubenzee, Sir W.
Proctor, K. HarveyVaughan, Sir Gerard
Raffan, KeithViggers, Peter
Rathbone, TimWaddington, David
Rees, Rt Hon Peter (Dover)Wakeham, Rt Hon John
Renton, TimWaldegrave, Hon William
Rhodes James, RobertWalker, Bill (T'side N)
Ridley, Rt Hon NicholasWaller, Gary
Ridsdale, Sir JulianWalters, Dennis
Rippon, Rt Hon GeoffreyWard, John
Roberts, Wyn (Conwy)Wardle, C. (Bexhill)
Robinson, Mark (N'port W)Warren, Kenneth
Roe, Mrs MarionWatts, John
Rossi, Sir HughWells, Bowen (Hertford)
Rowe, AndrewWells, Sir John (Maidstone)
Rumbold, Mrs AngelaWheeler, John
Ryder, RichardWhitfield, John
Sackville, Hon ThomasWhitney, Raymond
Sainsbury, Hon TimothyWilkinson, John
St. John-Stevas, Rt Hon N.Wolfson, Mark
Sayeed, JonathanWood, Timothy
Scott, NicholasWoodcock, Michael
Shaw, Giles (Pudsey)Yeo, Tim
Shaw, Sir Michael (Scarb')Young, Sir George (Acton)
Shelton, William (Streatham)Younger, Rt Hon George
Shepherd, Richard (Aldridge)
Silvester, FredTellers for the Ayes:
Sims, RogerMr. Carol Mather and
Skeet, Sir TrevorMr. Robert Boscawen.
Smith, Sir Dudley (Warwick)
Adams, Allen (Paisley N)Boyes, Roland
Alton, DavidBray, Dr Jeremy
Anderson, DonaldBrown, Gordon (D'f'mline E)
Archer, Rt Hon PeterBrown, Hugh D. (Provan)
Ashdown, PaddyBrown, N. (N'c'tle-u-Tyne E)
Ashley, Rt Hon JackBrown, R. (N'c'tle-u-Tyne N)
Ashton, JoeBrown, Ron (E'burgh, Leith)
Atkinson, N. (Tottenham)Buchan, Norman
Banks, Tony (Newham NW)Caborn, Richard
Barnett, GuyCallaghan, Rt Hon J.
Barron, KevinCallaghan, Jim (Heyw'd & M)
Beckett, Mrs MargaretCampbell, Ian
Beith, A. J.Campbell-Savours, Dale
Bell, StuartCanavan, Dennis
Benn, Rt Hon TonyCarlile, Alexander (Montg'y)
Bermingham, GeraldCarter-Jones, Lewis
Blair, AnthonyCartwright, John
Boothroyd, Miss BettyClark, Dr David (S Shields)
Clarke, ThomasHardy, Peter
Clay, RobertHarman, Ms Harriet
Clelland, David GordonHarrison, Rt Hon Walter
Clwyd, Mrs AnnHart, Rt Hon Dame Judith
Cocks, Rt Hon M. (Bristol S)Hattersley, Rt Hon Roy
Cohen, HarryHaynes, Frank
Coleman, DonaldHealey, Rt Hon Denis
Conlan, BernardHeffer, Eric S.
Cook, Frank (Stockton North)Hogg, N. (C'nauld & Kilsyth)
Cook, Robin F. (Livingston)Home Robertson, John
Corbett, RobinHowell, Rt Hon D. (S'heath)
Corbyn, JeremyHowells, Geraint
Cox, Thomas (Tooting)Hoyle, Douglas
Craigen, J. M.Hughes, Dr Mark (Durham)
Crowther, StanHughes, Robert (Aberdeen N)
Cunliffe, LawrenceHughes, Roy (Newport East)
Dalyell, TamHughes, Sean (Knowsley S)
Davies, Rt Hon Denzil (L'lli)Hughes, Simon (Southwark)
Davis, Terry (B'ham, H'ge H'l)Janner, Hon Greville
Deakins, EricJenkins, Rt Hon Roy (Hillh'd)
Dewar, DonaldJohn, Brynmor
Dixon, DonaldKaufman, Rt Hon Gerald
Dobson, FrankKennedy, Charles
Dormand, JackKilroy-Silk, Robert
Douglas, DickKinnock, Rt Hon Neil
Dubs, AlfredKirkwood, Archy
Duffy, A. E. P.Lambie, David
Dunwoody, Hon Mrs G.Lamond, James
Eadie, AlexLeighton, Ronald
Eastham, KenLewis, Ron (Carlisle)
Edwards, Bob (W'h'mpt'n SE)Lewis, Terence (Worsley)
Evans, John (St. Helens N)Litherland, Robert
Ewing, HarryLivsey, Richard
Fatchett, DerekLloyd, Tony (Stretford)
Faulds, AndrewLoyden, Edward
Field, Frank (Birkenhead)McCartney, Hugh
Fields, T. (L'pool Broad Gn)McDonald, Dr Oonagh
Fisher, MarkMcGuire, Michael
Flannery, MartinMcKelvey, William
Forrester, JohnMacKenzie, Rt Hon Gregor
Foster, DerekMaclennan, Robert
Foulkes, GeorgeMcNamara, Kevin
Fraser, J. (Norwood)McTaggart, Robert
Freeson, Rt Hon ReginaldMcWilliam, John
Freud, ClementMadden, Max
Garrett, W. E.Marek, Dr John
George, BruceMartin, Michael
Gilbert, Rt Hon Dr JohnMason, Rt Hon Roy
Godman, Dr NormanMaxton, John
Gourlay, HarryMaynard, Miss Joan
Hamilton, James (M'well N)Meacher, Michael
Hamilton, W. W. (Fife Central)Meadowcroft, Michael
Hancock, MichaelMichie, William
Millan, Rt Hon BruceShort, Ms Clare (Ladywood)
Miller, Dr M. S. (E Kilbride)Short, Mrs R.(W'hampt'n NE)
Mitchell, Austin (G't Grimsby)Skinner, Dennis
Morris, Rt Hon A. (W'shawe)Smith, C. (Isl'ton S & F'bury)
Morris, Rt Hon J. (Aberavon)Smith, Rt Hon J. (M'ds E)
Nellist, DavidSnape, Peter
Oakes, Rt Hon GordonSoley, Clive
O'Brien, WilliamSpearing, Nigel
O'Neill, MartinSteel, Rt Hon David
Orme, Rt Hon StanleyStewart, Rt Hon D. (W Isles)
Owen, Rt Hon Dr DavidStott, Roger
Park, GeorgeStrang, Gavin
Parry, RobertThomas, Dafydd (Merioneth)
Patchett, TerryThomas, Dr R. (Carmarthen)
Pendry, TomThompson, J. (Wansbeck)
Penhaligon, DavidThorne, Stan (Preston)
Pike, PeterTinn, James
Powell, Raymond (Ogmore)Torney, Tom
Prescott, JohnWainwright, R.
Radice, GilesWallace, James
Randall, StuartWardell, Gareth (Gower)
Redmond, MartinWareing, Robert
Rees, Rt Hon M. (Leeds S)Weetch, Ken
Richardson, Ms JoWelsh, Michael
Roberts, Allan (Bootle)White, James
Roberts, Ernest (Hackney N)Wigley, Dafydd
Robertson, GeorgeWilliams, Rt Hon A.
Robinson, G. (Coventry NW)Wilson, Gordon
Rogers, AllanWinnick, David
Rooker, J. W.Woodall, Alec
Ross, Ernest (Dundee W)Wrigglesworth, Ian
Ross, Stephen (Isle of Wight)Young, David (Bolton SE)
Ryman, John
Sedgemore, BrianTellers for the Noes:
Sheerman, BarryMr. Allen McKay, and
Sheldon, Rt Hon R.Mr. Ron Davies
Shore, Rt Hon Peter

Question accordingly agreed to.

Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved,That this House notes with approval the Government's continuing determination to work towards a viable and internationally competitive automotive industry located in the United Kingdom; and endorses the view that, subject to satisfactory terms and conditions, the merger of the commercial vehicle activities of Land Rover, Leyland and Bedford would contribute to that objective and provide the best prospects for secure long-term employment in the industry.