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Mr. Byers: 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.
Dr. Vincent Cable (Twickenham): 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?
Mr. Byers: 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.
Mr. Peter Snape (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?
Mr. Byers: 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.
Sir Norman Fowler (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.
Mr. Byers: 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.
Ms Julia Drown (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?
Mr. Byers: 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.
Mr. John Maples (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?
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