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Lord Razzall: My Lords, if I may intervene, I did not actually say that. I did not say that.

Lord McIntosh of Haringey: My Lords, the noble Lord suggested that what has happened is due to our failure to do what his party has been arguing for over a long period, which is to make an immediate commitment to the euro, regardless of economic

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circumstances. Perhaps he has not said it on this occasion, but I can assure him that members of his party from the Benches from which he speaks have made that suggestion on many occasions in recent weeks; I have been required to answer them. I can assure him that that is their view, but I do not believe that there is any magic wand or any "quick fix" of that kind which is available.

The noble Baroness asked whether it would be possible to find government time for a debate on this issue. That, as she knows, is a matter for the usual channels.

4.59 p.m.

Lord Islwyn: My Lords, first, will the Minister appreciate that I have no wish to vilify foreign investors, but what bothers me is the fact that 22 miles away from Longbridge, at Ryton outside Coventry, Peugeot, the French company, is making a huge success of its operation. What is more, it is drawing from roughly the same labour pool. Have the Government considered this issue from that point of view?

Secondly, I should like to ask the Minister whether any consideration has been given by the Government to taking the Rover concern into public ownership.

Lord McIntosh of Haringey: My Lords, in relation to my noble friend's first question, we are glad to recognise the success of Peugeot and its 206 line at Ryton. We are pleased that that particular foreign investment is going well. In response to my noble friend's second question, I saw the Socialist Worker-inspired posters at the demonstration--a marvellous, clearly well-supported and deeply-felt demonstration for which I have nothing but admiration. But when the Socialist Worker takes it into its head to demand re-nationalisation of Rover, does it carry with it the obligation on ordinary people in this country to buy Rover cars?

Lord Marsh: My Lords, is the Minister aware that when the Nissan project team arrived in this country some years ago, it took a conscious decision that if it decided to invest in the United Kingdom it would not do so on a site within travel-to-work distance of any British car company? Is the Minister aware therefore that the plant was staffed overwhelmingly by ex-miners and not ex-car workers? Does the Minister further accept that the productivity today of Nissan is some 300 per cent in excess of that of much of the British motor car industry? The idea that this is a question of the strength of sterling and entry into the single currency is grotesque. Does not the Minister accept that the real problem is massive over-capacity in the European car industry which successive governments in many countries have tried to meet with massive state subsidies and achieved nothing other than to prolong the agony?

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Marsh, appeared to be approaching his

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first question rather obliquely, but I suspect that he was saying that British car workers are no good and one could do better employing ex-miners.

Lord Marsh: My Lords, I was saying nothing of the sort. British workers and British managers made Nissan in the UK the success it is. I am simply saying that the problems of Longbridge go back a long way.

Lord McIntosh of Haringey: My Lords, I do not accept what the noble Lord is saying about the workers at Longbridge. Only to a very minor extent is productivity in the motor industry the reflection of militancy many years ago. Productivity in the motor industry is largely an issue of capital and management. Given the right management and the right capital, I am convinced that the workers at Longbridge are the equal of any in the world and that they continue to convince the world of that. I would not wish anything to be said from this Dispatch Box disparaging the workers at Longbridge.

In relation to the broader issue raised by the noble Lord of over-capacity in the car industry, that is the nature of capitalist production. When there is a threat of over-capacity we have to make better cars and sell them better. That is the solution not just for Rover and BMW, but for all car manufacturers.

Baroness O'Cathain: My Lords, I declare an interest as a former employee of the British Motor Corporation and also a minor pensioner of the Rover Group. The Minister opened with the statement that houses, people and whole communities will be affected. The grief that will arise from this situation is significant and I hope that your Lordships' House will not bat such words as "xenophobia" and so forth across the Chamber.

I want to ask the Minister two questions. I believe that sums of money were committed to the Rover plant at Longbridge, though they have not yet been paid over. In order to get something out of this wreck and as a lesson for the future, if government money is likely to be committed to a project, should not a working party be set up between the members of the company and people from the DTI? An ongoing investigation could therefore take place into what is happening in the plant. If some of our senior civil servants who are well skilled in getting to the bottom of these problems had been involved with people from BWM, perhaps the shock would not have been so severe and some action might have been taken.

Further, does the Minister have any firm views as to how the Government will help with the dealership network? That is in total disarray. People are talking about Alchemy buying the site and continuing some production, but the dealer network is in a serious condition and the ripples from Longbridge are spreading throughout the country.

Lord McIntosh of Haringey: My Lords, the noble Baroness, Lady O'Cathain, asked, first, about government money. It is true that a total of

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£152 million was to be made available to Longbridge, of which £129 was government money. The rest was to be raised locally. As the Statement says, that money is to be made available to the task force to deal not just with the social problems in the community, to which she rightly referred, but also any prospects there may be of reviving or continuing car manufacture at Longbridge. It cannot be assumed that it is available to Alchemy because that is now a separate deal.

The noble Baroness asked also whether a working party should be set up to bring together the company and the DTI. That is exactly what the task force is doing. Because BMW agreed to participate in the work of the task force, that company is now involved. Central and local government and agencies in the area are also involved. So the task force is doing what the noble Baroness asks us to do, and more.

Baroness O'Cathain: My Lords, my point was that it should have been done beforehand. Doing it now is rather like shutting the stable door.

Lord McIntosh of Haringey: My Lords, I indicated the extent to which, only one month ago, BMW was indicating its steadfast commitment to Rover production at Longbridge.

Lord Hoyle: My Lords, having seen the concern about their jobs of the 80,000 people in Birmingham on Saturday, I ask my noble friend whether he agrees that Alchemy, a venture capitalist with a short-term interest, is not the right company to be taking over at Longbridge. Can he say what the Government are doing to find someone more suitable to take over the factory and preserve jobs?

Lord McIntosh of Haringey: My Lords, my understanding was that the figure was 100,000 and not 80,000 people, and all credit to them. It was clearly a magnificent demonstration of solidarity. But it would not be appropriate for this Government to undermine the deal which is in negotiation between Rover and Alchemy, or to describe Alchemy in particularly pejorative terms. If it can be made to work and Alchemy intend to preserve jobs and car manufacture, that may be better than nothing. At the moment, that is what is on the table.

Lord Clark of Kempston: My Lords, is the Minister aware that the general public will welcome his statement that there is to be no nationalisation of Rover or any other car manufacturer, particularly in view of the taxpayers' experience with British Leyland? Secondly, the general public will be pleased to hear the Minister say that the introduction of the euro is irrelevant in relation to this problem. However, perhaps I can go back to December of last year when pointers were given to the Government. If action had been taken then, contingency plans could have been started in December rather than in March when the

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final decision was made. That is what is confusing the public. If BMW is not telling the truth, why cannot we do something about it?

Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Clark, puts words into my mouth which I did not use. I said that nationalisation of Rover was not a possibility. However, that is not to say that public ownership in itself is always to be deplored. The second point that the noble Lord made is just plain wrong. I did not say that the euro was irrelevant; indeed, Professor Samann himself said that it would have been easier for BMW if we had already been in the euro. You cannot say that it is irrelevant. What I rejected was the rather "quick fix" proposed by the noble Lord, Lord Razzall. As to the pointers in December that the noble Lord, Lord Clark, refers to, I have already quoted the statement of Professor Milberg which gives the lie to what the noble Lord, Lord Clark, says. I have nothing further to say on that matter.

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