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Rover Group

Volume 176: debated on Wednesday 18 July 1990

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To ask the Secretary of State for Trade and Industry what is the net benefit to the taxpayer of the sale of Rover to British Aerospace; and if he will make a statement.

The sale of Rover Group for the best available price brought considerable benefits for taxpayers. It relieved them of responsibility for a company which had swallowed up £3·5 billion in the past and which carried the contingent liability of the Varley-Marshall-Joseph assurances. That stood at £1·6 billion in March 1988 and was set to rise significantly over the corporate plan period. The deal also safeguarded over 190,000 jobs, mainly in the west midlands.

What is the chance of the new Secretary of State taking a leaf out of Hercules' book and cleaning out this particular Augean stable, the smell of which has ripened substantially in the past week with the revelation that eight secret meetings took place between his Department, British Aerospace and the Inland Revenue between March and July 1988 and that £411 million in secret tax concessions was offered as a further sweetener to British Aerospace? What hold does British Aerospace have over his Department, or does the Minister intend to deny that those discussions took place?

This is a continuing effort on behalf of the Labour party to impose on British Aerospace substantially increased burdens. The Commission has reviewed all those matters and reached a considered view. One of the findings was that £150 million was a fair and reasonable price. It also reviewed the tax questions. The time has come for the Labour party to tell the House whether it accepts the Commission's findings. If it does, it must eat an awful lot of humble pie.

If there was a hidden subsidy, surely one might expect the Opposition to approve of it, bearing in mind the fact that they are in favour of industrial subsidies and that they gave the British car industry billions of pounds. Is their sudden distaste for subsidies a genuine change of heart, showing that they have embraced the free market, or is it the usual mixture of hypocrisy and opportunism?

So that there is no misunderstanding on the matter, will the Minister confirm that he knows that the Commission is not yet satisfied about the tax arrangements governing that deal? Will he further confirm that he knows that it is demanding a written report on the arrangements that are made, and when the report is done, will he agree to place it in the Library so that everyone can see it?

Once again, the hon. Gentleman has not been listening. I have made it absolutely plain to the House that it has always been our intention to ensure that British Aerospace and Rover Group are treated in the same way as any other taxpayer. The Commission is simply seeking an assurance to that effect. The hon. Gentleman has some answering and apologising to do. Why does he persist in alleging undervaluation when he knows perfectly well that the Commission found that it was a fair and reasonable price?

On a point of order, Mr. Speaker. This is Question Time for the Secretary of State for Trade and Industry. Will we hear from him again?

Terrible bleats are coming from the Opposition. I fancy that they do not like being knocked about.