Skip to main content

Rover Group

Volume 176: debated on Wednesday 18 July 1990

The text on this page has been created from Hansard archive content, it may contain typographical errors.


To ask the Secretary of State for Trade and Industry when he expects to respond to the European Community's recent communication on the sale of the Rover Group.

As yet we have not received the formal decision letter from the Commission. When we do, we will reply expeditiously. We have decided, subject to any representations by British Aerospace, to accept the Commission's decision on repayment.

I thank the Minister for that reply. Will he ask the new Secretary of State whether he will clear up the mess created by his two predecessors and tell the House, as he must tell the Commission in due course, the details of the secret tax incentives given to Rover and British Aerospace for the shabby Rover deal? Will the hon. and learned Gentleman ask the new Secretary of State to condemn his predecessors for their deception of the House and the Commission?

The hon. Gentleman raised two points. I wish first to say something about my right hon. Friend the previous Secretary of State. In this respect, I speak on behalf of all Ministers and officials who had the privilege of serving under him. We very much regret what happened. My right hon. Friend was held in the highest affection and respect by those who knew him well, and I have a low opinion of those who now try to make personal political capital out of his misfortune. As to the—[Interruption.]

On the question of taxation, our position has always been that Rover Group and British Aerospace will be treated in precisely the same way as any other taxpayer. There is nothing in the Commission decision that casts doubt on that approach. The hon. Member for Dunfermline, East (Mr. Brown) owes the House an apology because he spoke of hidden tax concessions and, despite very careful scrutiny by the Commission, there is no evidence whatever of that.

I thank my hon. amd learned Friend the Minister for his generous tribute to the previous Secretary of State for Trade and Industry and I should like to be associated with that. Will he include in any response to the European Commission the fact that Rover had accumulated an overhang of £1·4 billion under the Varley-Marshall guarantee and had a further £1 billion investment programme? Had it remained in the public sector, there would thus have been potential for almost £2·5 billion in aid, which would have stuck a great deal more in the EEC craw than the minor sums that we are discussing.

My hon. Friend is right. He might also like to address his mind to two other matters. First, what was done has safeguarded about 190,000 jobs. Secondly, when Rover Group was in public ownership it gobbled up £3·5 billion which could otherwise have been more profitably used.

Although the Minister's Department is called the Department of Trade and Industry, does he agree that Britain is not allowed to have a trade policy because it is decided in Brussels? In view of what happened to Rover Group, it seems that we are not allowed to have an independent industrial policy either. Does the Minister agree that Sir Leon Brittan is now more powerful than he was when he was Secretary of State for Trade and Industry? Do not the Minister's civil servants tell him every day, "Minister, you cannot do this, that or the other because Brussels will not allow it", and is not that what irked the previous Secretary of State and made him rather vexed?

First, it is a pity that the hon. Gentleman was not here on 28 June 1990 when he might have caught your eye, Mr. Speaker, during the statement made by my right hon. Friend the then Secretary of State for Trade and Industry. Secondly, I understood that Labour was pretending to be a European party, but Labour Back Benchers are showing that they have an extreme dislike of the European Community. It would be interesting to know which represents the proper view in the Labour party.

Is my hon. and learned Friend aware that people in the west midlands are heartily sick and tired of all the accusations being levelled at Rover Group and British Aerospace? Car workers in the west midlands are anxious to get on with making the cars that are necessary for our economic improvement. In view of what the European Commission may say, will my hon. and learned Friend go ahead and tell it that negotiations between the companies and the Inland Revenue were entirely their own affair and that the benefits, if any, which might accrue from those negotiations can be set against the enormous amount of investment by British Aerospace and Rover Group in ever more credible products for the market?

My hon. Friend is entirely right. I suspect that his constituents were also interested in the express finding by the Commission that a sale price of £150 million was correct and reasonable. The hon. Member for Dunfermline, East has alleged from time to time that that was an undervaluation.

The hon. Gentleman need not shake his head because I have his quotes. It is time that he apologised for being so misleading.

Before the Minister gets too carried away, will he confirm that he expects to have to give a full, written report to the Commission about the tax concessions?

The Commission has made it plain that Rover Group and British Aerospace should be treated like any other taxpayer. That is what we have always proposed to do.