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16 Mar 2000 : Column 570

Future of Rover

Mr. Deputy Speaker (Sir Alan Haselhurst): Madam Speaker has selected the amendment standing in the name of the Prime Minister.

4.13 pm

Mrs. Angela Browning (Tiverton and Honiton): I beg to move,

The Opposition decided, in light of the developments this week on the future of Rover, that it was important that the House had an opportunity to debate the issue and to seek answers from the Secretary of State. The House will know that in 1994, when BMW purchased Rover, it was a profit-making company. It was remarked at the time by BMW that the United Kingdom was a good place to manufacture and produce motor cars.

Today's announcement, and the run-up to it, has meant that there is now a significant question mark hanging over the future of Rover and particular concern about the Longbridge factory and the many tens of thousands of people who work for Rover itself, for subsidiary companies and for those that supply Rover. The whole House recognises the importance of that company and that sector to the midlands in particular and to the whole economy of this country.

Last June, the Secretary of State for Trade and Industry stepped off a plane, held a photocall and press conference, and announced a new deal that he had brokered with BMW for the future of Rover at Longbridge. We were not favoured with a statement in the House on the subject. Indeed, the Government have not brought the subject of Rover to the Floor of the House since the Secretary of State held his press conference. It was left to my hon. Friend the Member for Bromsgrove (Miss Kirkbride) to raise the matter in an Adjournment debate in Westminster Hall in January.

To set the scene of the Secretary of State's announcement last June--to which we gave our public support--I remind the House of what he said at the time. The matter involved the first such application for state aid that he had dealt with since becoming Secretary of State--as the press reported--and he said:

The Secretary of State said that because new ground was being broken, the negotiations were complex and detailed, but they are now a matter of public record. The details include the £2 billion of investment put in by BMW and the £129 million of regional selective assistance and the

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local grants, which amounted to some £152 million of public money and which the Secretary of State put on the table in the deal that he brokered with BMW in June.

Had we had the opportunity to question the Secretary of State at the time, we would have asked many questions. Indeed, together with colleagues in this House and in the other place--and other Members of Parliament, including Labour Members--I have tabled a series of questions in the months that have followed to seek clarification of the nature of the deal that the Secretary of State brokered.

Mr. Barry Sheerman (Huddersfield): I have been looking at the questions tabled in the past few months and I cannot find the hon. Lady's name or those of her colleagues on questions mentioning Rover or BMW. Can she give us chapter and verse, or should we conclude that hers is a very late enthusiasm?

Mrs. Browning: I am about to read those questions out, including correspondence that I have exchanged with the Secretary of State on the subject. As the hon. Gentleman will know, it was the Conservatives who initiated the only debate that has been held, in which I made a substantive contribution from the Front Bench. I have yet to see a Secretary of State from any Department contributing to any debate in Westminster Hall, but that is not the approach that we take. If a debate is important, and Rover is important, I do not delegate the matter to a junior--I put my views and those of my party on the record. The hon. Gentleman should go on a PDVN course and learn to access information a little more accurately. However, I shall not be diverted by such trivial interventions, because this is a serious issue.

Many jobs are at stake in an important sector of the economy, and we demand information and answers from the Secretary of State about his own role in the deal that he brokered, what has happened since and why--just eight months later--the deal has not lasted a year, let alone the century that the Prime Minister claimed it would.

Mr. John Redwood (Wokingham): Will my hon. Friend confirm that it was the Secretary of State's attempt to gerrymander the regional aid map that delayed and prevented any agreement coming from Brussels for the important aid package to help investment? Would she confirm that the Secretary of State thought he could waive the rules, only to discover that the EU had strong rules that it did not like having ignored? Is not that why, when it comes to shares in the Secretary of State, it is all sellers and no buyers?

Mrs. Browning: My right hon. Friend makes a pertinent point about where to draw the line on the map of delay. It is a matter of grave concern that the £152 million--a key component of the deal--has been delayed. Even today, there has been no assurance that the money will be on the table.

I remind the Secretary of State of the words of the Minister for Small Business and E-Commerce, who answered the debate in Westminster Hall:

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    additional investment on the company's overall financial position.--[Official Report, Westminster Hall, 26 January 2000; Vol. 343, c. 89WH.]

When the Secretary of State announced the £152 million, there had been some brief contact between the Department and the EU's Competition Commissioner, Mr. van Miert, and his officials. However, it soon became apparent that the Secretary of State had not done his homework. He had not taken the trouble to make sure that what he was putting on the table in the negotiations would be in compliance with EU regulations. That is why, after many months of difficulty and uncertainty for Rover, that money has not been forthcoming.

Within a week of the Secretary of State's announcement, Mr. van Miert told my office that he was not inclined to think that the money would be approved automatically. He thought that it would take time and investigation before he would be convinced that the Secretary of State's bid for the money complied with EU regulations.

Mr. Richard Burden (Birmingham, Northfield): With the group of Labour MEPs representing the west midlands, I met Commissioner Monti, who is responsible for the EU's competition policy. I do not know whether the hon. Lady has met him. We asked him whether the British Government had not answered any questions, and he said that there were no questions that had not been answered.

Articles in the Official Journal of the European Communities have made it clear that the problem with the deal was not the delays that it suffered, but the alleged haste with which it was put together. How does that fit with the right hon. Lady's argument? Does she--

Mr. Deputy Speaker: Order. That is a long intervention, and I know that the hon. Gentleman is seeking to catch my eye.

Mrs. Browning: It is not the pace of the deal that matters, but whether it will hold together. Surely the Secretary of State should have done his preparation and homework, given the importance of the £152 million in the negotiation that he brokered with BMW.

The Secretary of State for Trade and Industry (Mr. Stephen Byers): I am grateful to the hon. Lady for giving way on what is an important point. She seems to imply that I should have received European Commission approval before I put the deal to BMW. Will she give me just one example from the Conservative Government's period in office when a regional selective assistance deal was agreed between the European Commission and the Government before the deal was struck with the company involved?

Mrs. Browning: No, and the reason is that the Secretary of State raised expectations on what was a false prospectus. Given how he described his role in brokering the deal, he should have been much more sure of his ground in terms of compliance. The important thing was not that the deal had been made, but his ability to deliver a watertight guarantee that he would get the money, which was a contingent element in the BMW deal. If the

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company has reneged on its part of the deal today, it must be because of deep disappointment that what the Secretary of State announced last June has not been delivered.

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