Rover Group

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 28th January 1987.

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Mr. John Mark Taylor:

asked the Secretary of State for Trade and Industry if he will make a statement on progress toward achieving separate and distinct destinies for the various subsidaries of the Rover Group.

Photo of Mr Paul Channon Mr Paul Channon , Southend West

Rover Group has successfully concluded negotiations for the sale of Leyland Bus and the majority of Unipart. Negotiations are taking place for the disposal of majority interests of Jaguar-Rover-Australia and of Istel. As I told the House on 2 December 1986, commercial discussions on Leyland Trucks are being taken forward. The best way to develop the other businesses in the group will be considered in the context of the Rover Group's corporate plan, which I am studying.

Mr. Taylor:

In thanking my right hon. Friend for that helpful reply, may I remind him that Jaguar, the first company to be liberated from the group, has just announced vacancies for 700 more men, and that last time he spoke in the House about Land Rover's future he looked to the prospect of either a trade buyer or privatisation? Since no trade buyer appears to be in prospect, may we look forward to privatisation?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

I am grateful to my hon. Friend for pointing out to the House the enormous success of Jaguar, not just recently but for the past few years, as a splendid example of what can be done in the private sector. My hon. Friend is entirely right to remind me of what I said about Land Rover. The company is to be retained within the Rover Group while preparations are made for its later flotation or trade sale. I shall bear in mind my hon. Friend's preference for a flotation.

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

Will the Secretary of State acknowledge that as each part is sold off the remainder will find it progressively more difficult to become viable?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

No, Sir. I do not think that I could agree with that. Many of the separate bodies that have been sold off have been loss-making and therefore will not make the situation worse.

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

Does my right hon. Friend agree that many of us accept that some of the privatisation schemes have been good for the future of the British motor industry, not least for Jaguar, and that the continuing entity of Austin Rover is of crucial importance? Does he agree that we must consider the fact that Austin Rover is building up a good export record, has a great future as long as it is given a fair wind, and is not a lame duck but an emergent swan?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

I agree with what my hon. Friend has said, as I so often do on matters relating to the motor industry. Austin Rover's export record is encouraging, as was its market share last month. I am sure that my hon. Friend is looking forward as eagerly as I am to discussing the corporate plan.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarfon

Is the Secretary of State satisfied that the Rover Group, even as now constituted, shows enough interest and involvement in matters of public interest as well as in its own profit, especially in the context of exports, to which he has referred, where Rover parts may be used for exporting things built up from them? If there is a change in the company's structure, can the right hon. Gentleman ensure that that aspect is properly safeguarded?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

I shall certainly consider what the hon. Gentleman has said. However, the directors of Rover Group have a fiduciary duty to the company. I shall have to examine in detail what the hon. Gentleman has said and write to him about it.

Photo of Mr Michael Grylls Mr Michael Grylls , Surrey North West

Is my right hon. Friend confident that the proceeds from the sale of those different businesses will be sufficient to make it unnecessary for Austin Rover to ask the taxpayer for further funds?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

I wonder whether I can persuade my hon. Friend to curb his natural impatience for news and wait until he hears the result of the Government's study of the corporate plan. I shall certainly bear in mind what my hon. Friend has said.

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

Why will the Secretary of State not admit that Jaguar's success has everything to do with the efforts of its management and work force and nothing to do with its ownership? Why will he not tell Mr. Graham Day to get on with the job of getting Austin Rover's share of the domestic market back to its level of 23 per cent. eight years ago instead of simply accepting the present level of 15 per cent. and declaring more redundancies among the people who work at Austin Rover and its suppliers?

Photo of Mr Paul Channon Mr Paul Channon , Southend West

I certainly agree that Jaguar's success has been due to the efforts of its management and work force, but it is quite wrong not to take its corporate structure into account as well. The fact that Jaguar has been privatised has been a major factor in the company's success.

As to the second part of the hon. Gentleman's question, I hope that he will join me in helping today to achieve the aim which he and other hon. Members have in mind, which is to increase Austin Rover's share of the domestic market. I am very glad to say that at the moment it is running above the level that the hon. Gentleman stated.