HC Deb 03 April 1980 vol 982 cc636-9
7. Mr. Michael Brown

asked the Secretary of State for Northern Ireland if he will make a further statement about the De Lorean motor car project.

8. Mr. Bruce-Gardyne

asked the Secretary of State for Northern Ireland if he has yet reached a decision on the latest application for financial assistance by the De Lorean company.

14. Mr. Cryer

asked the Secretary of State for Northern Ireland if he will make a statement on the De Lorean car company.

The Under-Secretary of State for Northern Ireland (Mr. Giles Shaw)

I understand that satisfactory progress is being maintained and that pilot production will start before the end of the second quarter of this year. I have not yet reached a decision on the company's application for additional assistance.

Mr. Brown

In the hope that my hon. Friend's mind is still open on the matter, and bearing in mind that many other public corporations are having to observe strict economies, may I ask my hon. Friend whether the whole incident concerning the De Lorean motor car project does not verge on the scandalous? He surely has a clear duty to treat with contempt the application for additional funds.

Mr. Shaw

The project was entered into by the previous Government under binding arrangements, and the present Government have every intention of carrying them out. I cannot agree with my hon. Friend that the position is scandalous. I view the potential creation of 2,000 jobs in the area as a matter of considerable importance to the Province. I assure my hon. Friend and the House that, in terms of additional expenditure, the Government will look most closely at the application that has been made.

Mr. Bruce-Gardyne

How can my hon. Friend look most closely at the application if the obligations are binding? Is he aware that Mr. De Lorean has now revealed that what he is after is not £5 million of extra Government money but £8 million?

Mr. Stallard


Mr. Bruce-Gardyne

Is there any precedent anywhere else in the United Kingdom, or for that matter in the world, for such a deal, by which that gentleman got all the equity for none of the cash, and on top of that apparently received a guarantee against exchange rate movements and increases in inflation?

Mr. Shaw

The arrangements to which my hon. Friend refers allowed the company to make application. What it did not suggest was a commitment that that application would be met in full. The Government are considering the application, the sums involved and the methods of funding, if any.

Mr. Cryer

Does the Minister accept that it is important to provide jobs in West Belfast, but also that the cost appears to be on the high side in this venture? Will he confirm that the electric reservoir moulding wonder process does not work, that the original wonder car was productionised by Lotus Cars, and that the total rights of the design and development, which had been paid for by the taxpayer, are retained by the De Lorean research partnership? Does not that seem to be a fairly bad bargain for the taxpayer?

Mr. Shaw

It is not true that the ERM process has failed. It will not be used for this project, but development work is proceeding on it satisfactorily. As regards development of the car, I should have thought that the hon. Gentleman would accept that development carried out by Lotus Cars, and engineering carried out by Renault, currently leading the world championship, indicate that the car will have a pedigree second to none in the market in which it is designed to compete. As regards the taxpayer, we have every intention of seeing that the vehicle sells, and sells well.

Mr. Hal Miller

When considering a request for assistance, will my hon. Friend look closely at the conditions in the motor industry in the United States, and not be led away by the forecasts of Mr. De Lorean? Will he take account of the forecasts of other car makers in this country who are attempting to sell sports cars in the United States?

Mr. Shaw

I appreciate my hon. Friend's concern and his knowledge of motor industry affairs. What is under discussion is a matter of forecasting not the sales or marketing but the additonal costs incurred on the present project. However, I confirm that we are taking the widest possible sounding on the projections so that we can reach the best possible decision.

Miss Maynard

Whilst I accept that the jobs in question may be unacceptably expensive, does the Minister agree that the latest figures show that Northern Ireland has the highest unemployment in Western Europe and the lowest wages, and that essential goods there are the most expensive? In view of that, should not the Government exclude Northern Ireland from their latest public expenditure cuts, which will only make more people unemployed?

Mr. Shaw

The matter has already been dealt with in general in the House, but in relation to the De Lorean project I trust that the hon. Lady will understand that with the 2,000 jobs in the plant comes a spin-off in terms of community expenditure that is significantly greater.

Mr. Pendry

Will the Minister accept once more from these Benches our general support for his approach to the De Lorean project? Will he inform his hon. Friends, in particular the hon. Member for Brigg and Scunthorpe (Mr. Brown), that the steel used at De Lorean is almost certainly from areas such as Scunthorpe, and that if his hon. Friend had his constituents' best interests at heart he would encourage the development of that project and not knock it? Further, will he tell the House the results of his talks, promised during the recent Appropriations debate, with the management of De Lorean on the question of absorbing more of the unemployed of West Belfast?

Mr. Shaw

In relation to both those points, I assure the hon. Gentleman that many British components, including steel, are currently being used. I hope that my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) will help us to reduce the price currently being offered by the British Steel Corporation. On the second point, I confirm that discussions will take place with the company to see whether we can obtain a weighting in favour of the long-term unemployed.