By Maurice Corina Industrial Editor
Bankers’ guarantees up to a maximum of £50m will be offered to the British Leyland Motor Corporation and its subsidiaries by the Government under Section 8 of the industry Act 1972.
Parliamentary approval for this short-term financial assistance will be sought next Wednesday when Mr Wedgwood Benn, Secretary of State for Industry, will make a further statement on the group’s capital requirements. He is also expected to name the team to help Sir Don Ryder, the Cabinet’s industrial adviser, in identifying longer term requirements.
These will determine the size of the proposed state investment in the equity shares. The ceiling of £50m on state guarantees for British Leyland’s borrowings over and above present facilities represents one third of the Department of Industry’s statutory limit on any sums and liabilities paid to industry as Section 8 aid. Bank guarantees, not large enough to require special parliamentary consent (which covers aid of £5m or more), have recently been given to Alfred Herbert and Ferranti, pending studies of their problems.
Pay claim suspended: A group of trade unionists at the Cowley car assembly plant agreed yesterday to suspend their pay claim
“as a gesture of goodwill in the present financial plight of British Leyland”. They have also offered to work essential overtime without pay until the company’s finances improve.
The decision was announced by Mr Paul Hogan, senior process engineer, who is on the factory committee of the Oxford branch of TASS, the supervisory section of the Amalgamated Union of Engineering Workers.