[G-CPTN]

Not quite 'vintage' but worth remembering IMO:-

On 6 February 1978 Stonefield Vehicles was taken over by the Scottish Development Agency, following the death of the entrepreneur who set it up. The vehicle that it produced was quickly recognised as a world-beating, cross-country truck, and it passed with flying colours the most rigorous military testing over an 18-month period. Its reputation was developing rapidly and the SDA's confidence in it was so great that a new factory extension was built, with a huge phosphating plant, capable of producing over 2,000 vehicles per year. In retrospect, this is certainly seen as an unwise and over-optimistic expansion when one of its main competitors—Unimog of West Germany—which has been established for some time, was producing 9,500 vehicles with the Mercedes name and a world-wide sales and service network behind it.

However, the general election pulled the plug out for Stonefield Vehicles. The return of a Tory Government in May 1979 saw the Scottish Development Agency being given new criteria. It was forced against its will to find a private buyer for Stonefield.

Because of that ultimatum, there was uncertainty among the work force and potential purchasers were not inspired with confidence. Thus, in spite of the growing success of the vehicle it became difficult to find a buyer. Yet I now know from the former sales director of Stonefield that there were then four major orders in the pipeline. The Malaysian order was subsequently won by Gomba-Stonefield, the Kenyan and New Zealand orders went to Unimog, and Oman bought from a variety of sources, no doubt with advice from consultants of one kind or another.

Because of the Government's bungling, all potential interest in Stonefield evaporated, and it collapsed on 31 July 1980. Ironically, on the very day it was closed, one of the vehicles, converted for fire-fighting, returned from the RAF with a glowing report.

The Public Accounts Committee was very unhappy about this whole episode—as it has been recently about Hamilton college as well. In September 1980 it criticised the Government for bringing about the collapse of Stonefield by their insistence on the injection of private capital. All that was bad enough in an area of already high unemployment and for a dedicated work force, but much worse was to follow.

There was a long campaign to save Stonefield, with the Cumnock work force playing the leading part. After eight months' campaigning, which took members of the work force to Westminster and all over Britain, the Stonefield name became widely known and substantial interest was shown by a number of potential buyers. I had contact with some of them, and I know that there were at least two buyers other than Gomba lining up. Indeed, my information is that an offer of £300,000 was made to the receiver, but that that was turned down on the advice of the SDA and the Scottish Office.

Then suddenly, out of the blue, at a press conference in Glasgow to which no local people were invited, the new owner was produced—like a rabbit out of a hat—by the Secretary of State himself. The right hon. Gentleman had a personal commitment and involvement in what happened on that day. No mention was made then of Mr. Abdul Shamji's connections with the Tory party, his friendship with the Prime Minister and the fact that he was being advised by a former Tory party official, who since 1983 has been the hon. Member for Mid-Kent (Mr. Rowe). No mention was made of the background of Gomba Holdings, of its other activities or of its registration on the offshore haven of Jersey. No details were given of how much it paid for Stonefield, or the arrangements for continued production and for dealing with the creditors of the former Stonefield Vehicles. All my parliamentary questions received negative responses because of so-called commercial confidentiality.

Although Mr. Shamji said that he had accountants, engineers and market researchers, it is clear, looking at the company since November 1980, that the takeover by Gomba had the hallmarks of a rush deal. It was suspicious at the time and it has become more so in retrospect.

I have obtained evidence from Gomba which confirms this. I have a draft submission, which Gomba prepared for the ombudsman, which is a complaint of maladministration against the SDA. I supplied the Minister with a copy of the document before today's debate. It reveals that there was no written agreement about the continuity of supply of vital components, the transposing boxes from Borg Warner and the axles from Salisbury Transmission, which were vital to the unique design of the truck. It appeared that there was only a verbal assurance of continuity of supplies. Subsequently, that was the basis of a huge and bitter dispute between Gomba and the SDA, which was later used as the excuse for Gomba transferring production from Cumnock to Strood, near Rochester in Kent—incidentally, in one of the new enterprise zones.

The Gomba document points the finger also at the hon. Member for Edinburgh, Central, who was a Minister at the Scottish Office. The Minister met Mr. Shamji on 31 March 1981. The document states: "On 31 March, Mr. Fletcher, MP, a Minister at the Scottish Office, held a meeting at which were represented SEPD, SDA and Gomba Stonefield, Mr. Michael Grylls MP was also present." I wonder why "Mr. Michael Grylls M.P." was "also present".

§ The Under-Secretary of State for Scotland (Mr. Allan Stewart)

A constituency interest.

§ Mr. Foulkes

The Minister says that the hon. Member for Surrey, North-West (Mr. Grylls) was present because of a constituency interest. If so, why was I not present on that occasion, having a much greater constituency interest? Perhaps the Minister will confirm that that is so when he replies, in view of his trite intervention.

The document continues: "At the meeting the Minister stated that GKN and Borg Warner would have to confirm in writing the exact position over tools, drawings, supply and price. Gomba Stonefield would supply a full list of all the items which they sought from a settlement. Since both these requirements clearly would precede any settlement, Gomba Stonefield left the meeting confident of being called to a future meeting within a few days." At that stage both sides would have submitted the information. But that night the SDA unilaterally sent cheques to GKN and Borg Warner in settlement of their claim on terms which gave Gomba Stonefield nothing that it sought. That implies that the Minister had authorised the payment of the cheques to creditors without ensuring the continuation of vital supplies to Gomba Stonefield.

Such action does not surprise me. The Minister always refused to go to the factory. He never accepted an invitation to attend the factory and he insisted that the vehicle had no future. No doubt his motivation for it to succeed would not be very high. The prejudicing of the operation by the prejudgment and misconceptions of the Under Secretary of State throw further doubts on his ability to continue as a member of the Government.

I shall repeat for the Under-Secretary of State the four accusations against the SDA in the Gomba document.

First, the SDA gave Mr. Shamji verbal assurances about continuity of supply which it had no right to give.

Secondly, the SDA was inexcusably dilatory to wait over 12 months to settle debts which centrally affected the operation of Gomba-Stonefield. Indeed, it prevented the company progressing at all for that period.

Thirdly, the SDA paid out large sums of taxpayers' money to secure no benefit for anyone except the creditors. Since the debts were hypothecated on specified toolings and stocks, Gomba-Stonefield did not understand why those toolings and stocks had not passed to it.

Fourthly, the SDA changed its ground over several months until it ended up in a position which gave no help to the successor company. In doing so, it damaged the trading position of Gomba-Stonefield almost irreparably. I hope that the Under-Secretary of State can give satisfactory answers to those four serious accusations, if not tonight, then certainly in writing as soon as possible.

Although Gomba appears to have a genuine complaint against the SDA, it does not justify its subsequent behaviour, which now appears to have been to keep the Cumnock factory going only until it had alternative suppliers for axles and transposing boxes and an alternative factory.

Gomba was not popular with traders in Cumnock because of its delays in settling accounts and the confusion and mystery surrounding the operation. It was not a 965 surprise to me when, in spite of repeated assurances of its intention to stay in Cumnock, Gomba did the industrial equivalent of a moonlight flit to Kent. It was typical also that it simultaneously put in a so-called offer to buy the factory, which has still not been concluded after many months, but which proved very effective in blunting criticism of the move south because of the apparent vain hope that Gomba had alternative plans. Has anything come of the supposed offer to buy the premises? What is the position on ownership or lease of the Cumnock premises?

The whole episode has left a sour taste with the people of Cumnock who supported Stonefield-Gomba through the fight, the workers who fought for it, the local district council which backed Stonefield-Gomba, and many others all over Scotland, including some of my hon. Friends who turned out to support it and were proud that Scotland could produce a world beater.