Japanese Investment

Oral Answers to Questions — Trade and Industry – in the House of Commons at 12:00 am on 9th March 1994.

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Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I have no plans to visit Japan in the near future, although I had a most useful visit in January, during which I had the opportunity to discuss inward investment with several key Japanese industrialists.

Photo of Mr Robin Corbett Mr Robin Corbett Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (National Heritage)

As the Secretary of State and his Government have given up encouraging British investment in British industry and rely increasingly on the Japanese, on his next visit would he like to discuss with Japanese industrialists who are thinking about investing here the shabby way in which British Aerospace treated its partner Honda when it sold Rover behind Honda's back? What does he think that that will do to encourage the confidence of Japanese investors?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman knows full well that discussions took place with Honda about these matters as they were taking place with BMW. The fact is that the board of British Aerospace decided that the best interests of British Aerospace and the company that it looked after were served by a deal with BMW. It would do the hon. Gentleman a great deal more good if he would now concentrate on building on the success of the deal that is available rather than on the problems of one that is not.

Photo of Mr Philip Oppenheim Mr Philip Oppenheim , Amber Valley

Is there not some irony in this new-found love of Japanese investment among Opposition Members? Did they not complain bitterly when Honda first became involved in Rover? Is not the lesson of the days when Red Robbo and his mates were cranking out Allegros and Marinas—that is, when they were not asleep or on strike—that the less say that politicians, particularly Labour politicians, have in who runs the car industry, the better?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend is absolutely right to draw attention to the disastrous investments that the Labour party made in the British motor industry, which were partly responsible for its collapse and, therefore, the fact that so much of it is now foreign owned. The United Kingdom has more than 41 per cent. of total Japanese investment in the European Community, and it must be in the interests even of Opposition Members to understand that we should admire that, praise it and seek to build on it.

Mr. Robert Ainsworth:

Does the President of the Board of Trade realise the amount of damage that will be done not only to our prospects for future investment from Japan but directly to Rover if there is a complete breach between Honda and Rover? Is he prepared to play an active part in ensuring that such a breach does not happen?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

I have no grounds for believing that either side is approaching the difficult negotiations that it has to undertake with anything other than a realisation that they must be successfully concluded. The hon. Gentleman must understand that, the moment I appeared, the consequence would be simple—sboth sides would ask me for taxpayers' money to support their own ambitions.

Photo of David Lidington David Lidington , Aylesbury

Does my right hon. Friend agree that a major reason why this country receives the lion's share of Japanese investment in Europe is that non-wage labour costs are much lower in the United Kingdom than on the continent? Will he do all in his power to ensure that the differential is maintained?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

My hon. Friend is right. That is why the opt-out clause that my right hon. Friend the Prime Minister negotiated is so important. Japanese investors in this country know full well that they have a Government who are sympathetic to their interests and who will fight their corner as British companies when they invest here, so they have continued to come. The surest way of choking off Japanese investment would be to have a Labour Government, with their determination to impose on Japanese potential investors costs that they would not wish to pay.

Photo of Robin Cook Robin Cook , Livingston

Does the Minister recall hearing the Minister for Industry assuring the House in the statement on Rover in January that his Department would do all it could to help the relationship between Honda and Rover to continue? In view of his reply to my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth) that, the moment he appears, taxpayers' money will be required, will he explain what his colleague meant when he said that the Department would do all it could and tell us whether he and his Ministers are doing anything at all to keep the relationship open?

Photo of Mr Michael Heseltine Mr Michael Heseltine President of the Board of Trade

The hon. Gentleman will be fully aware that we have had conversations with both parties on a continuing basis, but there is absolutely no guarantee that my Department's offering in some way to facilitate the dialogue would be in the best interests of either of the parties negotiating.