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Mr. Burden: Will the hon. Gentleman give way on that point?

Mr. Gibb: I will not. There is very little time left.

The Secretary of State said that the grant was irrelevant, despite boasting wildly about it when it was announced. For Conservative Members, the bigger issue is what has happened to the United Kingdom economy that has meant that, in the past month, we have faced the possible loss of Harland and Wolff shipyard and of one of our major indigenous car industries. What has happened since August 1996, when the chief executive of Siemens said:


What has happened since October 1995, when the chairman of BMW said:


    Great Britain is currently the most attractive country among all European locations for producing cars?

BMW does not think that now, so what has happened?

I can tell the House. There has been a new, damaging approach to manufacturing and to business since the Government came to power, the consequences of which we are beginning to see: £5 billion a year in extra regulatory costs on British business as a result of measures introduced by the Government; a proliferation of red tape, and new and more powerful interventionist regulations; £35 billion of extra taxes on business over this Parliament; more corporation tax; more stamp duty on business transactions; more duty on diesel; a new pension funds tax that puts up business' pension costs as well as its capital costs; the climate change levy; and IR35. All those measures are damaging to the British economy, to businesses that are trying to survive in a fiercely competitive world, to businesses large and small and to businesses that are trying to turn themselves around, as Rover was.

Damage cannot be undone by sending out an army of spin doctors to spread a different message or to manipulate media coverage. Government is about policy decisions and their effects on people's lives and prospects, not rhetoric or media handling. We need Ministers who concentrate their time and intellectual effort on getting those decisions right, rather than on worrying about the backdrop for the next press conference and the next photo opportunity. If Longbridge goes, the blame for the huge damage that will be done to the west midlands economy will lie with incompetent Ministers and an economic policy that is costly and damaging to British business.

6.48 pm

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alan Johnson): This issue is vital. Thousands of people face an uncertain future and thousands of families in the midlands will be extremely concerned about today's announcements. To be fair, many Opposition Members acknowledged that this is a complex matter, but it is a shame that the official Opposition--instead of coming to the House in the proper spirit and

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seeking a mature debate--launched a shoddy personal attack on my right hon. Friend the Secretary of State, which missed entirely. They also used today's sombre news to try to score a few petty political points, but failed dismally in that objective. They have demeaned the issue before us.

The hon. Member for Tiverton and Honiton (Mrs. Browning) made a convoluted point about grant aid. We negotiated that aid quickly because there was the threat that BMW might move to Hungary, and then sought clearance. As my right hon. Friend the Secretary of State said, there is no other example of negotiating grant aid and regional selective assistance where the deal is not done first, before seeking approval. The proposal was referred by the European Commission to a full investigation; nothing unusual there. In fact, the Government recently supported that measure in relation to Volkswagen. We went through the normal process. The actual deal was commercially confidential, as are all such deals. Opposition Members know that full well.

Apart from a couple of other spurious points, that amounted to the total contribution by Opposition Members to this important debate. There is no telling whether we would have come to the House to initiate a debate but I give the Opposition one point out of 10 for initiating a debate on an important issue. It is a shame that members of the Opposition Front Bench did not contribute more constructively.

The hon. Member for Twickenham (Dr. Cable), in a thoughtful seminar on the single European currency, referred to the strength of sterling--not a point raised by the hon. Member for Tiverton and Honiton. I remind the House that the biggest rise in the value of the deutschmark against sterling was in the seven months leading up to the general election in May 1997. There were many interventions and contributions from this side of the House about the strength of sterling, which was cited also by the hon. Member for Twickenham in a balanced speech, but no one offered a solution. The remedy that he offered--joining the single European currency--was spurious, given current circumstances.

My hon. Friend the Member for Birmingham, Northfield (Mr. Burden) displayed as always his commitment to his constituents and community, together with his expertise. He rightly paid tribute to the work force. The hon. Member for Tiverton and Honiton did not refer once to the work force or the community in Longbridge and their concerns. It was left to my hon. Friend to do so. He pointed out that BMW has received help and assistance from government--particularly from my right hon. Friend the Secretary of State. He made the important point, in relation to the strength of sterling, that BMW is a pan-European operator.

I was extremely pleased that my hon. Friend mentioned the success of motor sport in this country. Any debate about taking forward the British automotive industry needs to emphasise its success stories. Motor sport is certainly among them and is a benchmark against which most automotive companies should measure themselves.

The right hon. Member for Sutton Coldfield (Sir N. Fowler) made from the Conservative Back Benches the eloquent speech that should have come from the Conservative Front Bench. He spoke of the media's

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obsession with the days of Red Robbo, flares, tank tops and T.Rex. He spoke of how much Longbridge has changed since those days but said there was a strange tendency among the media constantly to hark back to them. I do not agree with everything that he said--he was kind enough to send me a note saying that he could not be here for my reply--but he struck the right note and made an important contribution.

My hon. Friend the Member for Birmingham, Hall Green (Mr. McCabe) emphasised the vital role of Longbridge in the region and highlighted the uncertainty surrounding the move to new owners, to which I will refer in a moment. I completely understand the concerns of the hon. Member for Bromsgrove (Miss Kirkbride), as one of the two hon. Members with responsibility for Longbridge constituents. She asked whether there were guarantees about employment and the future. We are working on the basis of an announcement just made; discussions have yet to take place involving my right hon. Friend. I remind her that, during an Adjournment debate in January, she said:


In terms of the way in which the situation develops--

Mr. Deputy Speaker: Order. Far too many conversations are taking place.

Mr. Johnson: It is impossible to read the future, but I assure the hon. Member for Bromsgrove that my right hon. Friend the Secretary of State will make the points about employment opportunities at the meeting that is to be held with Alchemy Partners this evening.

My right hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) made an important point about sales and marketing. Rover's sales slumped by 26 per cent. in 1999. That is to do with the way in which the product is marketed, to do with the sales, and to do with the whole management approach to promoting and selling these important products.

The hon. Member for Bournemouth, West (Mr. Butterfill) mentioned the long-term success of Longbridge, which is obviously relevant to the debate. My hon. Friend the Member for Coventry, North-West (Mr. Robinson) demonstrated his long experience of the industry. The hon. Member for Banbury (Mr. Baldry) said that we should not have a culture of blame, and that it was entirely wrong to apportion blame in this instance. It is a shame that he did not mention that to the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb).

BMW has not entirely removed itself from the picture. It will retain a manufacturing presence in Oxford, where the Cowley plant is producing the Rover 75, which is increasingly successful in the marketplace. It will also continue with plans for the new Mini. The forecasts for that new model are very optimistic, given that it builds on the heritage of the existing car. BMW has decided to continue with the engineering and design function in the United Kingdom, which constitutes a tremendous vote of confidence in the UK's engineering and design capability.

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We will work constructively with the new owners to understand their future plans for the business, and to provide any support that may be justified and appropriate. The existing aid package cannot simply be transferred to new owners; any package will depend on the specific circumstances and plans of those new owners, and on whether they meet the proper conditions for support. I can, however, assure the House that we will do everything possible to ensure that Rover has a future in this country.

Rover is a name with which the British public strongly identifies. In the past, its fortunes and troubles have mirrored the economic and social issues of the day. It needs to get through the difficult times, not least because of the enormous effort and wholehearted co-operation of its work force over many years, but particularly since the BMW takeover in 1994.

In 1998, BMW-Rover undertook a wide-ranging review of Rover Group's activities. As part of that, BMW shared with Rover's employees its plans for the future, and explained that their success depended on the achievement of significant cost reductions and--importantly--new agreements on competitive working practices. It is to the credit of the Rover employees that they rose to the challenge, and consented to more flexible working practices and productivity agreements.

Let me tell the House what is about to happen. The Secretary of State will meet Alchemy Partners later this evening. We shall want to clarify BMW's intentions in relation to Land Rover. The Secretary of State will visit Rover sites in the west midlands tomorrow. A key issue in relation to Longbridge is whether transfer of ownership to Alchemy Partners is concerned, and what the plans for the business are. The Government will be anxious to work closely with new owners to maximise the chances of success for the Rover business, and to consider what support might be justified and appropriate. Rover wants to be part of the success story of the British car industry.


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