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Rover

4.39 p.m.

Lord McIntosh of Haringey: My Lords, with the leave of the House, I shall now repeat, in the form of a Statement, the Answer to a Private Notice Question given by my right honourable friend Mr Stephen Byers, the Secretary of State for Trade and Industry in another place. The Answer is as follows:

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    "Over the next few weeks our objective is to manage the changes that will flow from BMW's decisions in a way which minimises the number of jobs to be lost, whether directly or indirectly, in the supply chain or dealership network. We will also need to put in place a programme of economic regeneration and job creation.

    "When I met workers on the assembly line at Longbridge the day after BMW's decision, their anger and shock was clear, but so was their commitment and strength of character. The West Midlands has overcome some difficult times in the past. I am confident that it will do so again. On behalf of the Government, I can say that we will do all we can to ensure that together we can meet the challenges that lie ahead".

My Lords, that concludes the Answer.

4.44 p.m.

Baroness Miller of Hendon: My Lords, I thank the Minister for repeating as a Statement the Answer previously given in the other place. I speak as one who, when I became a Member of your Lordships' House, bought a Rover as I felt that it was appropriate that I should own a British car, to find only a few weeks later that Rover had become part of BMW. Now we find that a reputable British marque is--not to put too fine a point on it--being discarded, with the tragic results of losses of jobs for thousands working at Rover, as well as for those working in the component industries.

We naturally welcome the creation of a task force to review the consequences of the sale of Rover, but would it not have been more effective if such contingency work could have been set in hand last December when the threat to Longbridge first became clear to the DTI? Or do the Government claim that Ministers were never aware that there were problems at Longbridge--something that would be quite extraordinary on their part? If they were aware, will the Minister tell the House when Ministers first concluded that Rover/BMW as a whole might be in some difficulties?

If, as the DTI claims, Dr Milberg said last December that difficulties only surrounded investment in the R30 car, did the DTI step up its efforts at that point to secure the grant which might have saved this part of the project? If so, when, and how?

I understand that, several weeks ago, the German magazine Der Spiegel carried an article that BMW itself was in difficulty, solely because of Rover, and that it was contemplating ditching it. If that is the case, can the Minister say whether we employ a commercial attache in Germany? Would not part of his duties be to inform the Government in this country of those matters? Would not the most sensible course now be to allow the Permanent Secretary at the DTI to publish the minutes of the discussions, including notes of telephone calls between Ministers and BMW, in order to clarify this matter? We could then dispose of all these claims and counter-claims.

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The future of many thousands of jobs is now at stake. That, as the Statement quite rightly says, must be the matter that is uppermost in all our minds. There has been much blaming of BMW, but does the Minister agree that jobs in British industry will not be saved by vilifying foreign investors, given that inward investment is hard enough at this time because of the weakness of the euro?

Can the Minister tell the House what is being done to secure an alternative buyer to Alchemy for the Rover plant? Can he also tell us the latest state of play as regards the sale of Land Rover to Ford? Finally, will he undertake to come to the House and to allow a debate in government time when the report of the task force that he has just announced is received?

4.47 p.m.

Lord Razzall: My Lords, like the noble Baroness I, too, should like to thank the Minister for repeating this Answer as a Statement. I believe that this is the first time that Government Ministers have made a Statement on developments at Rover. For that reason, I shall be grateful if he will use this opportunity to answer one or two questions covering wider areas than those set out in the Statement.

First, will the Minister confirm the Government's opposition to the expressions of xenophobia, and in particular the anti-German feelings, with which this debate has been conducted in certain sectors of the press? Will he further confirm that the Government have no part in that view and that a country that is obviously so dependent on foreign investment must condemn views of that kind whenever they are expressed and by whomever they are expressed?

Can the Minister also take this opportunity to agree with me that the approach taken by the Tory Opposition to the issue, which has been demonstrated by the words of the noble Baroness this afternoon, does no service to the employees of Rover, in particular those at Longbridge? A kind of, "Who said what to whom and when?" amateur detective story approach tends to mask the seriousness of the issues that are at stake here. One does not have to be a "Brain of Britain" or even a winner on "Who Wants To Be A Millionaire?" to realise that a company that has been losing over £1 billion--as BMW was losing on its UK investment in Rover--must at all times consider the future of that investment?

Furthermore, it is also apparent to anybody who has been involved in these issues that until a final decision is taken by the management of a particular company, it will always say that no decision has been taken. Indeed, perhaps the Minister will confirm that as late as the end of February the top management of BMW was saying at the Geneva Motor Show that it had absolutely no intention whatsoever of closing down Rover or withdrawing its investment from that company. So will the Minister please confirm that the line which is being taken by the Tory Opposition is an irrelevance to the real issue?

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Also, will the Minister confirm that the real problem, as the Labour Party and the Government will not say and the Tories cannot say, regarding what has happened at Rover, is that our currency has for far too long been significantly overvalued against the continental currencies? Honda has said it this week; Ford has said it this week, as have representatives of the CBI. It will not come as a surprise to your Lordships' House that we from these Benches would regard the only significant solution to such a problem recurring--indeed, had the appropriate steps been taken earlier perhaps this could have been avoided--is entry into the euro at the appropriate exchange rate. Will the Government now accept that the only way of preventing catastrophes of this nature is for them now to give a clear route map to entry into the single currency, and not something of the micro proportions which the Treasury is now putting in place? Can they give a clear announcement of a clear plan, which will obviously include the whole process of entry into the single currency, including how the currency will be managed "down" during that period?

I said that the Labour Government will not say that this is the real background to the Longbridge tragedy. Does the Minister accept that the Tories cannot say it, because of course they regard the euro debate as the issue that will win them next election? Finally, will the Minister go so far as to say that when the Leader of the Opposition travels around the country on the back of a lorry, whipping up opposition to the euro, he is playing with the livelihood of the workers of Longbridge?

4.51 p.m.

Lord McIntosh of Haringey: My Lords, having listened to the debate in another place on this PNQ, perhaps I may say that I am grateful to noble Lords opposite at the very least for the reduction in decibels on this occasion and in this House.

The noble Baroness, Lady Miller, says that the Rover marque, of which she is a loyal adherent, or has become a loyal adherent since coming to this House, has been discarded. However, the R75 is still being made in Cowley and other Rovers are still being made in this country. I have to say that BMW is a significant player in the British motor industry, and its continued contribution to that industry should not be undervalued.

The noble Baroness repeats the canard that in December we were told that there was a threat to Longbridge. She clearly did not listen to my right honourable friend when he quoted Professor Milberg precisely. He said:


    "I never said that the BMW group would have to reconsider investment at Longbridge".

Indeed, as the noble Lord, Lord Razzall, has reminded us, Professor Milberg said at the Geneva Motor Show on the 28th February that they were--and I quote:


    "serious and steadfast in our commitment to Rover at Longbridge".

So the suggestion that is being made--that we were aware of a threat to Longbridge which was positively being denied by BMW and that we should disbelieve

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it--is not particularly plausible. Indeed, I agree with the noble Lord, Lord Razzall, that there is not much to be gained from this sort of amateur detective work on what has happened in the past.

Nevertheless, the Secretary of State has made it clear that, subject to commercial confidentiality, which in very large part depends on how much BMW is willing for him to say, he will make available to the Trade and Industry Select Committee all the documents that he can, not just when he meets the committee on Wednesday, but before then. Our commitment to open government in this respect is unimpaired.

The noble Baroness asked whether we should not have stepped up our efforts to secure the grant from the European Commission. Yes, it has been a problem that when you use the Article 88(2) procedure it takes a long time to get the grants. That is because the European Commission is now open: it seeks to make its thinking known to allow for possible objections. However, we are assured by BMW that this was not a significant issue in its decision.

The noble Baroness also asked whether we would stop vilifying foreign investors. We never started. The noble Lord, Lord Razzall, is quite right: we have always rejected any suggestion that we should indulge in the kind of xenophobia which regrettably has been seen in some of the tabloid press in recent weeks in this country. It is not in our interests, in the automobile industry or anywhere else, to attack those who invest in this country. It is in our interests to see that such investment is well justified and that other people are encouraged to come and invest in this country as a result.

The noble Baroness asked whether there was any alternative to Alchemy. We do not intend to undermine Alchemy at this time. That is the deal which is being discussed with BMW and we do not propose to intervene. So far as Ford and Land Rover are concerned, I understand that a memorandum of understanding has been produced and I am not aware of any setback in the negotiations.

As to the issue raised by the noble Lord, Lord Razzall, about the overvaluation of the currency, we have always recognised that for manufacturing industry in general the strength of the pound in relation to the euro is a difficult problem. However, we simply cannot accept that using the magic wand of declaring entry into the euro straightaway would somehow resolve these problems so that the currency would go down and our interest rates would converge with those in euroland. It is a very nice thought and it would be lovely if it were true, but I do not think that any serious economist thinks that is the case.


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