Rover-BMW

– in the House of Commons at 3:30 pm on 9th May 2000.

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Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 3:30 pm, 9th May 2000

With permission, I would like to make a statement concerning the latest developments at Rover.

Earlier today, BMW announced that it had agreed to sell Rover cars to the Phoenix consortium. Negotiations have been concluded and contracts signed. This is clearly good news—for the workers at Longbridge and the wider community in the west midlands. I am sure that it is news that all hon. Members will welcome, especially my hon. Friend the Member for Birmingham, Northfield (Mr. Burden) who is at Longbridge this afternoon and has worked hard to support the work force during this difficult period.

The agreement reached earlier today will preserve volume car manufacture at Longbridge; it will safeguard the majority of jobs there and minimise the knock-on effect in the supply chain.

I would like to add my personal congratulations to John Towers for the way in which he pulled the consortium together and brought what I know have been difficult negotiations to a successful conclusion. He has been determined and dogged in the face of hostility and criticism. His personal strengths will be invaluable to the Phoenix consortium.

Since BMW's decision to sell Rover, the Government's main concern has been with the workers at Longbridge, Rover suppliers and the communities affected. They have faced a considerable period of uncertainty over the past six weeks. It has been something of a rollercoaster period for them—swinging between dismay and hope as their future was decided in various negotiations with BMW.

Today's news finally provides some welcome certainty for the Longbridge site. However, there will still be a number of redundancies. Our priority now is to do everything that we can to help those who will be affected, to provide training and to attract new jobs to the area. That is the role of Government—to manage change and to equip people for change, not to leave them the innocent victims of change.

We have always been clear that the role of Government is not to run commercial negotiations between the interested parties. The Phoenix consortium has not sought Government finance for its proposals. John Towers has always been clear with me that the Phoenix bid had to be viable on its own and would get funding from commercial sources, and that is the case.

The Government have not played the old role of throwing money at a problem in the hope that it would go away. Nor have we adopted the laissez-faire attitude of the previous Government—just standing to one side and doing nothing. Instead, we have taken an active role to facilitate the commercial negotiations over the future of Rover, and to provide support for those workers and companies adversely affected by commercial decisions.

Our role has been to bring people together and to move the negotiations forward. It was the Government who brought John Towers and BMW together for their first face-to-face meeting a month ago on 10 April and we have remained in contact with both parties throughout the negotiations.

We must now turn our attention to those who will be adversely affected by today's announcement. I am pleased that most of the work force will be offered a future at Rover, but we need to provide support for those who, regrettably, will lose their jobs. The Government will do all that we can to help.

I can announce that the taskforce that we created will remain in place, and I expect that its continuing work will take account of all developments, including today's announcements and the consequences for suppliers. It will produce a final report to me at the end of June.

My right hon. Friend the Secretary of State for Education and Employment and I have already put in place measures to assist any workers made redundant, to help affected supplier companies and to assist in attracting new investment and employment. Those measures will remain in place.

I am also able to confirm that the £129 million promised to the taskforce will remain available for good-quality projects in the region that provide long-term economic regeneration and job creation.

We must not underestimate the remaining difficulties ahead. The new owners of Rover will have to sell cars in a highly competitive market. The car industry is a fast-moving global market, going through major structural change. These are difficult times for vehicle manufacturers throughout the world, but a number of recent announcements have shown the strength of vehicle manufacture in the United Kingdom.

Last week, Vauxhall announced £189 million of new investment, creating 500 new jobs in its Luton factory. Honda has announced £130 million of new investment in Swindon; Peugeot has doubled production; Jaguar achieved record sales and record production in 1999; and last month's sales figures showed that British-built cars increased their sales in the United Kingdom, against the general trend.

There will be many lessons to be learned from Longbridge, which we will need to reflect upon. However, it is clear that there can be no return to outdated interventionism. The corporate state has been tried, and it simply did not work. Neither did a naive reliance on laissez-faire, which led to a crippling obsession with what Government should not do. The role for Government is to create an environment that encourages enterprise and creates wealth and jobs—[Interruption.] A third way, if the right hon. Member for Bromley and Chislehurst (Mr. Forth) would have it so.

Today belongs to John Towers, the Phoenix consortium, the workers at Longbridge and the people of the west midlands. Through adversity, they have all demonstrated great strengths, and we look forward to working with them to meet the challenges that lie ahead.

Photo of Angela Browning Angela Browning Shadow Secretary of State, Shadow Secretary of State for Trade and Industry

We welcome the fact that the Phoenix bid has been secured. We are particularly encouraged that it attracted financial support from the market.

It is nearly a year since the Secretary of State said that the long-term future of Longbridge was secure. He said today that there are lessons to be learned. I hope that this time, he and his Department will at least take an interest in the progress of Rover, and not be the last to know what is happening in an important industry in the UK. Although we have followed with interest the information that has come out today, I have some questions for the Secretary of State. Phoenix has taken over production of the business, but has it also acquired all the assets at Longbridge? What is the Secretary of State's understanding of the long-term future of the Swindon plant, on which Phoenix now has an option? Can he confirm exactly how many redundancies are expected?

How will today's announcement impact on the Rover dealerships? Are their futures secure? Does the right hon. Gentleman anticipate supporting applications for European Union funds for the company or for the region? What arrangements have been made for the export distribution of Rover, which has been locked into the BMW operation in Munich?

When the R30 was proposed, I asked the Secretary of State in a written question what impact that would have on UK suppliers. He replied that the R30 would provide opportunities for UK suppliers. Does the Phoenix bid continue to offer opportunities for UK suppliers?

Finally, how confident is the Secretary of State about the much-needed investment in the short term before Rover breaks even in two years' time?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I think that there will be disappointment on both sides of the House that the hon. Lady was not able to congratulate John Towers on the role that he has played. There will be disappointment that the right hon. Member for Wokingham (Mr. Redwood), who has criticised John Towers and Phoenix throughout the exercise, is not even in the House this afternoon for the statement.

The reality is that the people of Longbridge and of the west midlands will judge the Conservative party by its response to this issue. It ill becomes Conservative Members to talk about playing party politics with this issue, because that is exactly what they have done throughout. While we were getting our sleeves rolled up and doing the work, they were doing nothing. They were issuing press releases and notices that did not help the negotiations at all.

The reality is that there is a new owner for Rover, with a viable future—and with the commercial decisions that will have to be taken. However, it is not the job of Government to intervene in those commercial decisions. The hon. Lady will be pleased to know that the dealer network supports the proposal; the network is part of the Phoenix consortium.

As for the assets at Longbridge, we know that Hamshall—the engine facility—and Powertrain will be retained in the ownership of BMW. There will be developments at Longbridge which BMW and, no doubt, the Phoenix consortium will need to discuss.

The matter offers a clear lesson about the role of Government. The negotiations have been commercial; we have brought people together and I am pleased that there has been a successful conclusion. However, it is not part of our role to intervene in the way suggested by the hon. Lady. That is not the part that we shall play. We intend to support and facilitate. John Towers and Phoenix have made it clear that they have no proposals for applications for public finance, so I do not intend to answer a hypothetical question.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee

I congratulate my right hon. Friend on his statement. He has not had the easiest of rides over this issue, but, were it not for his persistence in backing the Phoenix proposal and ensuring that it was on the agenda, we should not have reached this stage. In congratulating John Towers on his persistence, we must give due credit to the persistence displayed by my right hon. Friend.

I do not want to strike a sour note, but I have one question. The sums involved are comparatively small when set against the ambitions for the new models that are being developed. Is there any evidence that further funding could be available? I realise that the Government have no responsibility whatever to achieve such funding, but, as my right hon. Friend has played a part in bringing people together, can he tell us anything about the further investment that will be necessary for the survival and success of the scheme?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend is correct. There have been some difficult times over the past few weeks—some of them, I have to point out, created by his Select Committee, although I do not want to dwell on that point; the Trade and Industry Committee played a valuable role in the process.

On the substance of my hon. Friend's question, the Phoenix consortium is clear that, for the foreseeable future—the short and medium term—it has a viable project. However, the consortium makes it clear that it wants to enter a joint venture or an alliance with a major global car manufacturer for the long term. The consortium has been precise publicly as to its intentions: the short and medium-term approach is to safeguard the maximum number of jobs at Longbridge, but it is looking for an alliance with a global player in the near future so as to develop in the way described by my hon. Friend.

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

May I add a warm welcome to the announcement, and extend congratulations to Mr. Towers and his team—singling out Mr. Hemming in particular—in the face of much scepticism?

In view of the new arrangement, will the Secretary of State assure me that the Department of Trade and Industry has ceased all communications with Alchemy on the alternative, parallel proposal?

I welcome the fact that no public subsidy will be involved, but what will be the position of the Inland Revenue on the substantial tax implications arising from the losses of BMW-Rover and the acquisition of the new enterprises?

Will the Secretary of State also comment on the fact that, although the announcement is unambiguously excellent news, there is still a grave crisis in the car industry? That may be highlighted in a few days by the announced closure of Dagenham. Does he agree with the Confederation of British Industry, the Trades Union Congress and the Engineering Employers Federation that the crisis is primarily attributable to the high pound, or does he share the view of the shadow Chancellor of the Exchequer who said this morning that the high pound is good news for British industry and that we should get used to it?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

Alchemy made a clear public statement earlier today that its discussions with BMW have terminated as a result of the contracts that have been entered into.

On the relationship between Phoenix, BMW and the Inland Revenue, those matters will be dealt with in the normal way that they would be processed by the Inland Revenue.

On the hon. Gentleman's point about the strength of sterling, it is worth noting that, although there are difficulties in some parts of manufacturing as a result of the strength of sterling and the relative weakness of European currencies—it is worth reminding the House that, over the past week, the pound has depreciated in value against the dollar and the Japanese yen—some manufacturers in the car sector are still investing in the United Kingdom and in Vauxhall, Honda and Jaguar. Therefore, there is some good news in the car sector. We know that Ford is reviewing its operations in the whole of Europe, but that has not been motivated by any concerns about the strength of sterling. It has been led by over-production in the car market, which, in the case of Ford, is about 20 to 25 per cent. in Europe.

Photo of Mr Peter Snape Mr Peter Snape Labour, West Bromwich East

Does my right hon. Friend accept that there will be unabashed rejoicing among thousands of families in the west midlands at his announcement today? Many Labour Members have watched and listened with concern to the amount of criticism that he personally has had to put up with over the past few months, so will he accept our congratulations on his announcement? Does he not think that it is a great pity that it was not met with greater pleasure by the cynics on the Opposition Benches, some of whom had hoped that Rover would fail to better their own political advantages?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

There has been an attempt by some Opposition Members to use the issue for narrow party advantage, but I have to say that there are some honourable exceptions. [HON. MEMBERS: "Name them."] I shall not name them because it may do what political careers they have some damage. However, I value the help that they have been able to give. In the taskforce and as constituencies Members of Parliament, they have played a valuable role.

My hon. Friend is right. We now need to reflect on what has happened. We must recognise that, although today's announcement is good news and that people will be celebrating, we should not lose sight of two issues. First, there will be a number of redundancies. When I spoke to John Towers about half an hour ago, he thought that he would be able to keep the number of redundancies to below 1,000, which would be excellent news, given the prospects that we were facing. However, each of the individuals made redundant will face a real crisis and we have to give them help and support.

Secondly, there will be challenges ahead for Phoenix as the new owner of Rover and of Longbridge. We should not underestimate that point. I know that the Phoenix consortium does not underestimate the challenges that it will face, and we look forward to working with it, as we do with other companies, to overcome the difficulties that might lie ahead.

Photo of Mr Norman Fowler Mr Norman Fowler Conservative, Sutton Coldfield

I declare an interest as a working member of the Rover taskforce. I congratulate John Towers and his team on the success of their negotiations, which will be welcomed in the west midlands. I very much wish them well.

Is it not important to stress that recovery has not yet been won and that it will almost certainly require tough decisions by Phoenix along the way? Irrespective of what has happened today, it must remain a vital objective that the industrial base of the west midlands is expanded. That must remain a priority for the region.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I thank the right hon. Gentleman for the constructive role that he has played as a member of the taskforce. I value his input into its deliberations and recommendations.

The right hon. Gentleman makes the important point that, while there is good news for Longbridge, there will be consequences throughout the west midlands that will not be helpful. We should look for ways of encouraging new investment including inward investment and creating new jobs for the future.

Over the past six weeks I have learned at first hand of the great strengths that exist in the west midlands. There are strengths of character and the skills that are needed for the jobs of the future. I have no doubt that when an inward investor considers the opportunities that the west midlands has to offer, we shall find within a matter of days rather than weeks that announcements will be made by major multinationals that they will locate in the area. That will be the clearest signal to the people of the west midlands that they have something that is valued and that they have players who could go anywhere in the world but are choosing to locate in the area. I shall be doing all that I can in the hours and days ahead to secure such decisions.

Photo of Ms Julia Drown Ms Julia Drown Labour, South Swindon

I welcome my right hon. Friend's announcement. As he knows, the future of many of my constituents is dependent on the future of Longbridge. Obviously we are still expecting some redundancies and some scaling down at Longbridge. Can my right hon. Friend assure my constituents that the taskforce, which is mainly designed around the west midlands, will continue to work with workers in my constituency, who are also affected by the decisions, as well as others in the supply chain, to ensure that as many as possible of their highly skilled and valued jobs are retained and their futures secured?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend has been a powerful advocate for the Swindon plant. As at present, BMW is retaining the facility. However, as the plant is dependent on both Longbridge and Solihull, there will be a knock-on effect depending on the outcome of the detailed negotiations with Phoenix and those that are continuing with Ford on the situation at Solihull. Much will depend on the future strategy that the new owners of the two operations decide to develop.

I can give my hon. Friend an assurance that the help that we want to give to the west midlands is the help that we shall provide to facilities and plants in other parts of the country that will be affected by these decisions. It may mean that we shall need to find additional resources to meet demands, but it is something that we are prepared to do. We shall reconfigure our budgets to ensure that the people of Swindon or others in the supply chain elsewhere are recognised as the innocent victims of what is happening. We shall not leave them; we shall stand with them and overcome the short-term difficulties that they will face.

Photo of John Maples John Maples Conservative, Stratford-on-Avon

Can the Secretary of State give the House any information on the future of the Gaydon design and test centre, where several thousand people are employed in south Warwickshire? Does he know how many of the employees will have their jobs safeguarded by the Phoenix bid? Is he in a position to say whether Ford has yet confirmed that as part of its takeover of Land Rover it will take on Gaydon and nearly 2,000 employees? Ford said originally that it would but it then became clear that it was a matter of negotiation. Is the right hon. Gentleman able to clarify any of these points?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

We have been in discussions with Ford about its proposals for Gaydon. Its discussions with BMW are still continuing. It hopes that they will come to a conclusion within the next two months or so. It is a complicated set of discussions and due diligence is taking place. Ford is working on the proposal, as originally suggested, that it would take over the Gaydon facility and those employees who are linked with Land Rover at Solihull. A number of those employees will then be linked with the Mini, which is to remain at Cowley. That announcement was made by BMW today. Other employees may be engaged by Phoenix.

As far as I am aware, Phoenix has not yet made a statement about its intentions regarding workers at Gaydon who may be linked with any models being developed under the new ownership of Phoenix at the Longbridge plant. Our latest information is that Ford is still discussing with BMW the acquisition of the Gaydon site and the workers who would go with the Land Rover operation.

Photo of Geoffrey Robinson Geoffrey Robinson Labour, Coventry North West

My right hon. Friend has been fulsome in his tribute to Mr. Towers and his team. I am sure that he will be pleased to know that all of us on the Government Benches agree with him on that. Is he aware that we feel that he has played a critical role in the negotiations? He has been plunged into a crisis not of his making, and has supported an arrangement with Mr. Towers that was subject to attack on many sides, and we should like to congratulate him on that.

The important lesson to be learned—which the Secretary of State has not mentioned—is that his Department will continue to play a critical role in such matters in future. As we look forward to a more settled future after the present crisis, international arrangements and partnerships will have to be agreed so that Rover's future can be more secure. We pay tribute to my right hon. Friend's magnificent achievement, but ask him to give a commitment to ensure that those arrangements can be secured, thus avoiding similar crises in future.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I thank my hon. Friend for his warm words. I assure him that I do not see today as the end of the book—rather, one chapter has come to an end and a new one is beginning. Much work will need to be done. The point that I made about working together to meet the challenges ahead addressed indirectly the sorts of initiatives and proposals to which my hon. Friend referred. The Department and the Secretary of State will continue to play a role in helping the new owners of Rover in the United Kingdom and internationally. We will do that for the Phoenix consortium, the workers at Longbridge and the wider community in the west midlands.

Photo of Mr Robin Corbett Mr Robin Corbett Chair, Home Affairs Committee, Chair, Home Affairs Committee

On behalf of the people of Birmingham and the west midlands, I thank my right hon. Friend for his efforts in bringing Phoenix and BMW together. I also thank him for confirming that the taskforce and its funding will be continued to help casualties of the change in the business.

Will my right hon. Friend join me in encouraging all those who got together to keep Rover on the road to get behind the wheel of a Rover, the better to ensure the future of Longbridge as well as jobs in its supply chain and dealerships?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

One of the interesting facts to emerge is that sales of Rovers have taken off in the past month, as many people are choosing to buy Rover models. If John Towers and the Phoenix consortium maintain that level of sales, they will have no difficulties in future. I certainly know that John Towers and the Phoenix consortium have thought about their marketing strategy in detail, and I hope that people will consider carefully the attractive models offered by the new owners of Rover.

Photo of Julie Kirkbride Julie Kirkbride Conservative, Bromsgrove

The news that the bid is going ahead is extremely welcome and heartening for the 1,500 workers in my constituency employed at Longbridge. However, it has been a time of great anguish and uncertainty for those people, so it is important that the Phoenix bid has a long-term future.

Will the Secretary of State give us further details about his conversations with Mr. Towers today? The flow of events so far suggests that production at Longbridge will be cut by half to between 150,000 and 200,000 cars. Is that consistent with 1,000 job losses and maintaining a work force at Longbridge of about 7,000?

Will the Secretary of State also tell us what car will replace the Rover 25 and Rover 45? Is such a car in the pipeline, or will that depend on an international company coming forward with a new product for Longbridge?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I do not know whether the BMW has been sold yet.

As the new owner of Rover, John Towers is addressing those issues. It is only right and appropriate that, as the new commercial owner of Longbridge, he should make announcements about the number of redundancies and the new models that he wishes to develop at the plant. Today, he said clearly and publicly that Longbridge will develop models such as the Rover 75, which is coming up from Cowley. I know that the Phoenix consortium want to develop the estate version of that car. Proposals have been announced by John Towers and the Phoenix consortium, but it is appropriate that such announcements are made by the commercial body now responsible for those decisions, not by me as Secretary of State.

Photo of Mr John Taylor Mr John Taylor Conservative, Solihull

Will the Secretary of State say a little more about Land Rover in my constituency, and about Rover pensioners generally?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I welcomed the opportunity of visiting, with the hon. Gentleman, the Land Rover plant in Solihull two or three weeks ago. It was valuable for me to see at first hand the excellent facilities at the plant and the commitment of the work force in difficult circumstances. I know that Ford is committed to the future of Land Rover, and they have exciting plans to develop the Solihull site.

The hon. Gentleman has raised the issue of pensions before. We have received assurances about the security of pensions, but I am waiting to receive confirmation in writing so that I can put in writing the response received from BMW and the new owners of Longbridge and Land Rover at Solihull. I shall do that not only for present employees but for pensioners who are concerned about the future of their pension entitlement.

Photo of Ms Debra Shipley Ms Debra Shipley Labour, Stourbridge

I join my colleagues in welcoming my right hon. Friend's statement today, which will come as a great relief to my constituents and to the small businesses located in my constituency that supply Longbridge. I am pleased that he will support those who are made redundant and their families. However, may I ask about the £129 million which, I understand, will remain available to the taskforce? To be obvious about it, how can businesses in my constituency gain access to that money?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

We have in place a scheme to help companies in the supply chain that face difficulties, and we have made £12 million available already. Given the nature of my hon. Friend's constituency, it is entirely possible that the organisations and employers that she is talking about will regard access to support for the supply chain as a means by which we can be of immediate assistance. If individual companies are feeling the pressure of events, they should get in touch with the taskforce, which is monitoring the situation and ensuring that those who are experiencing difficulties can be routed in the right direction.

Photo of Tony Baldry Tony Baldry Conservative, Banbury

The Secretary of State will be aware that, all along the M40 corridor, from Oxford to Birmingham, there are many component manufacturers. When Alchemy was in play, representatives told the Select Committee that, because of the pound's strength, the only way to make the figures work was by sourcing more components from overseas. What assurances has the right hon. Gentleman been given by the Phoenix group that it hopes to continue to source components in the west midlands and the UK, whenever possible?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The Phoenix consortium is more likely than any of the alternatives that were on offer to source more components in Britain. Part of its marketing strategy will be that the cars that it makes are British cars, made by a British-owned company. I think that that will be a strong selling point, which it is good news for component suppliers. I know that the Select Committee took evidence on the subject and that it is a matter of concern, but I believe that the Phoenix option will be far better for suppliers than either Alchemy or closure of the Longbridge site would have been.

Photo of Lynne Jones Lynne Jones Labour, Birmingham, Selly Oak

I, too, congratulate my right hon. Friend on all the efforts that he put in behind the scenes to help bring about today's welcome announcement. I endorse his comments about John Towers and his perseverance in the face of criticism—perhaps those comments apply to my right hon. Friend as well.

However, do the Government accept that the pound is overvalued, that the low value of the euro does not reflect the strength of the European economy, and that that is harming our manufacturing industry? Does my right hon. Friend agree that the Government should work with our European partners to do everything possible to bring about a more realistic alignment of those currencies?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend is right to point out that certain sections of manufacturing are experiencing difficulties as a result of the relative strength of the pound against the European currencies. I happen to believe that the best way in which the European currencies can begin to strengthen is through effective economic reform. A wholehearted embracing of the recommendations of the Lisbon summit would be the best way of ensuring that European economies demonstrate their commitment to economic reform. That would help to strengthen the European currencies, which is where I think that the problem lies, rather than in the strength of sterling, given that, as I said, it has depreciated in value against the American dollar and the Japanese yen over the past few days.

Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

The Secretary of State has indicated some rationalisation in the supply chain to Rover for which he might be prepared to make available additional resources. Given his experiences last time, has he clarified that that would be within European Union rules?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The hon. Lady is one of those hon. Members who have played a constructive part as constituency Members of Parliament in what I know have been a difficult few months for many Members and their constituents. She raises an important point. If state aid is involved, it must clearly now receive approval from the EU. However, much of the taskforce's work—certainly with help in the supply chain—does not fall within European state aid rules. Therefore, we can and are already making support available in the supply chain; companies are already receiving financial support. We do not have such a problem with many of the taskforce's proposals. Support for the supply chain is one example of our making decisions that are not within the EU' s remit.

Photo of Mr Dennis Turner Mr Dennis Turner Labour/Co-operative, Wolverhampton South East

As Chairman of the Catering Committee, I think that we ought to have a really lovely party today to celebrate. We are all very glum on a day on which we have had wonderful news. I assure the Secretary of State that there will be singing and dancing in the streets of your constituency, Madam Speaker, as well as mine, and throughout the black country and the west midlands.

I thank the Secretary of State for all his work behind the scenes in negotiations. I would also like to say a special word to the Prime Minister, who last week received a deputation from the workers at Rover. He was very courteous and concerned about the plight of Rover. Today, the great cloud is lifting. I agree with my hon. Friend the Member for West Bromwich, East (Mr. Snape) that we should rejoice; today is a lovely day.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

I thank my hon. Friend and look forward to raising a glass or seven with him this evening.

Photo of Evan Harris Evan Harris Liberal Democrat, Oxford West and Abingdon

I join the Secretary of State in welcoming the Longbridge solution to the Rover problem. Does he recognise the concerns of my constituents who work for Rover at the Cowley plant in Oxford, where there will not necessarily be dancing in the streets? What reassurance can he give those workers who face being laid off because, under the Phoenix plan, the Rover 75 line will move to Longbridge months before the Mini goes to Cowley? Even though, since Thursday, Oxford is no longer a Labour stronghold, will he still put political energy into the problems at Cowley to ensure the short-term and long-term future of the highly skilled workers at that modern plant?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

The hon. Gentleman's final remark ill becomes him. Perhaps when he reflects on it, he will regret having made it.

When I visited the shop stewards and management of Cowley about four weeks ago on returning from a meeting with the BMW management in Munich, I was very clear with them that the issue affected not just Longbridge but all plants in the Rover group that were part of BMW. We have been raising the question of Cowley in discussions with BMW throughout the past few weeks. The hon. Gentleman needs to be aware that although BMW's announcement today said that the 75 line would be moved to Longbridge, it confirmed that the Mini would be made at Cowley.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

Yes; BMW has given guarantees about that. However, the hon. Gentleman raises an important point about the gap between the R75 going to Longbridge and the new Mini beginning production at Cowley. Earlier today BMW gave an assurance that although there will be a gap, there will be no redundancies as a result of the decisions that it has taken. I am sure that the hon. Gentleman will welcome that.

Photo of Ian Pearson Ian Pearson Labour, Dudley South

May I add my welcome for today's news and warmly congratulate my right hon. Friend on his active role in brokering a commercial deal that offers a brighter future for the work force at Longbridge? Does he agree that for the future, topline sales are vital for Rover and other British car manufacturers? British jobs depend on British people buying British cars. Will my right hon. Friend undertake to publicise widely the car models that are made in Britain and encourage people to buy British?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

In a highly competitive market, there must be a product that people want to buy. I know from my conversations with John Towers that he is mindful of the situation. Good will alone will not make Phoenix successful. It must offer a good-quality product at a price that people are prepared to pay. That is what Phoenix intends to do. Given the hard-headed approach that it is adopting, it stands a great chance of success.

Photo of Tony Wright Tony Wright Labour, Cannock Chase

I congratulate my right hon. Friend on his announcement. It may have been greeted with visible disappointment on the Opposition Benches, but I can assure him that throughout the west midlands it will be greeted with satisfaction and hope. Will he make sure that what he has just said about investment and regeneration connects with the revisions to the assisted areas map that are under consideration? Many west midlands constituencies are being severely affected by the revision of that map—for example, four out of five wards in my constituency have been dropped from the original proposal. If we are serious about west midlands regeneration, will my right hon. Friend make sure that the statement on assisted areas connects with his statement today?

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend will be aware that we have just concluded the consultation period on the revised map, and we are now considering our response to that. I have no doubt that the situation in the west midlands will be one of the issues on which we need to reflect and which will inform our response to the consultation exercise.

Photo of Ken Purchase Ken Purchase Labour/Co-operative, Wolverhampton North East

I of course add my welcome to the many others that have been given in the House. There is a long journey ahead. We should pause and recognise that the role played by the trade unions during the long negotiations has been crucial. Their patience, understanding and perception of the problems has been exceptional. I know that during the coming months and years, the trade unions and their working members will work closely with the management to ensure that on competition, unit costs and the general production of a superb range of cars they will work together. We should recognise that working together is always better than working alone.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend is right to point out the difficulties that still lie ahead. There is no getting away from that. We can celebrate today, but we should not lose sight of the fact that difficult decisions will have to be taken in the period ahead. My hon. Friend is also right to point out the valuable role—and, if I may add my own comment, the positive and constructive role—that the trade unions played in the exercise that we have been through over the past six weeks or so. They have been a force for good in what has happened, and we should not lose sight of that. They will play an increasingly important role in the period ahead. As my hon. Friend says, if Phoenix is to be the success that we all hope that it will be, people will have to work together with a real sense of partnership. That is the best way of overcoming any difficulties that may lie ahead.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

Obviously, the whole country breathes a sigh of relief today. I do not believe that there is a constituency that would not have been touched if Rover had been allowed to close. Whether through the dealerships or the component manufacturers, we will all benefit from the good news. Thanks ought to go to John Towers and to the trade unions, but questions must be asked. What will happen to the Rover 30? Will that come to Longbridge? Will an export market in America be opened up for the MG sports cars? Increased sales in the American market will give encouragement to the workers at Rover and to the component manufacturers.

Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry

My hon. Friend raised the issue of the R30 with the head of Rover UK during a Select Committee meeting and received an answer that was less than satisfactory. We should continue to argue for the development of the R30 in the UK. It is a UK idea and its development here would be a compliment to our manufacturing base and car industry.

My hon. Friend's question also raises an important point about access to the American market for the MG and Land Rover, which has perhaps not been marketed as well as it could have been. I have no doubt that the new owners—Ford in the case of Land Rover, Phoenix in the case of the MG—will consider export opportunities, especially to the United States.