§ Motion made, and Question proposed, "That this House do now adjourn."—[Captain Bing.]
§ 3.0 p.m.
§ Mr. Christopher Shawcross (Widnes)
Having regard to the hour, and to the hope I entertain that perhaps other hon. Members may wish to take part in this discussion, it will be necessary for me to telescope the many facts and figures which I wished to give the House concerning this subject. The title of the subject which I desire to raise is: "Reform of the motor industry." I think it would be useful if at the outset I define what I mean by "motor industry." First of all, I mean the manufacture and production of motor cars, distribution and exchange, and finally the maintenance of motor cars. By the term "motor car" I include all types of motor vehicles manufactured in this country. The word "reform" presupposes that there is some evil which it is necessary to reform. Therefore, it is necessary for me to make out a case for the existence of such an evil.
I would go so far as to say that the present state of the motor industry is a national scandal and a disgrace of the first magnitude. From many aspects the motor industry, as defined, is a ramp and a racket on a large scale. I shall have to prove that, as briefly as I can. It is necessary to look a little at the background in relation to which the motor industry in its present condition stands. I, with I dare-say hon. Members on both sides of the House, have noticed a recent tendency to say that almost every industry in which one happens to be interested or talking about at the moment is the most vital and most important industry in the whole country. Then when we go upstairs in committees and in groups to examine the 1585 details we constantly find that the industry in question is regarded as the most unattractive industry of the whole lot; that it is unattractive because the labour conditions are bad, and one cannot, therefore, get into it the number of workers required in order to develop and make the best use of it for our export trade.
I would say that our motor industry could and should at the present time be our most important export industry. Secondly, I would say that it could and should at the present time be the most attractive industry from the point of view of the worker. The background to which I referred in relation to the export trade is, of course, this. At the present time the possibilities of exporting motor vehicles of all kinds are immense; they are almost incalculable. First of all, there is Europe, and I need not say more about that, because the facts are obvious. Then there are the Far Eastern countries, including, of course, India, and the one which we have just been debating, Burma. Then there is Russia. I am informed that recently representatives of the Russian Government stated that their present requirements and needs for motor vehicles of all types amounts to the staggering figure of 20,000,000. When one thinks of that figure in relation to the total output in the prewar days, it may seem a slight exaggeration. Nevertheless, I think I have shown that there is an almost illimitable demand for these motor vehicles.
I do not want to say much about the second point, namely, the labour conditions and how they ought to be and could be as attractive as in any other industry, whatever it may be. That is obvious to anybody who knows, as hon. Members do know, what a modern motor factory can be like, and to those who remember what high wages and short hours have been secured in these factories in America. It is not the same here, but I suggest it could be. With regard to the present state of the motor industry, I would ask hon. Members to look through the newspapers or use their own eyes to see what is happening. Look at the new cars that are being turned out, or about to be manufactured, and look at their prices. I; not it obvious that the manufacturers are intending to go back to 1939 as q sickly as they can, instead of going ahead to 1950, as they ought to do? The manufacturers are determined to make hay while the sun shines. They know 1586 there is an enormous worldwide demand at the moment, and they think that by taking a short view, by churning out quickly models far which they have the plant, tools and equipment, they can make a big profit and take no heed of the future.
I want to go into some slight detail as regards the multiplicity of models to which it is apparent the manufacturers of the industry as a whole intend to return, models which existed before the war. I have been unable to obtain any accurate figures; indeed, it has been impossible to obtain official figures for any one year in regard to certain matters. Neither the Board of Trade nor the Ministry of Supply, nor the Society of Motor Manufacturers and Traders, nor any other body can give any accurate figures on many of these matters. Upon the best calculation that I have been able to make, before the war there were no less than zoo different types of models of motor cars manufactured by the industry in this country, and there were about 50 or 60 separate firms at the same time, not, of course, each making 100, but a great many of them making four, five and six models and others two and three models or two models. It would be almost laughable, if it were riot so serious, that this state of affairs not only should have existed before, but should be the state of affairs to which the industry appears to be determined to return as quickly as it possibly can. I would like to give the House a figure—again it may seem exaggerated but I believe it to be accurate. In 1938 the industry turned out no less than 550 different types of commercial vehicles.
I have attempted to put the present position of the industry in a nutshell in this equation which I have endeavoured to formulate. It is based on the 1935 statistics which, as I have said, are the last which have any kind of official authority. It is a comparison between our industry and the American. In the United States, with only double the number of man-hours, the industry produced 15 times the amount of motor car. The amount of motor car is, I would suggest, not the single vehicle—that comes to 10 times and is itself pretty formidable—but taking into account the size of the cars, their efficiency, comfort, horsepower and so on, I would say that the amount of motor car produced by the 1587 American industry with only double the number of man-hours before the war was 15 times more than our industry could manage or attempt. The remarkable fact about that is that it was achieved in America with double the wages and with the result of producing and selling to the consumer cars at half the price.
That puts it in a nutshell, but I would like to give the House a few figures to support it. In 1939, eight British firms out of a total of 50 or 60 had 88 per cent. of our production; that is to say, of the total number of cars they produced 88 per cent., and amongst that proportion they made no less than 39 different engines. In America exactly the same proportion, namely, 88 per cent. was turned out by 10 different manufacturers —two more than our eight—and they produced only 15 different engines.
Take the leading models. It was found on examination that it may be said fairly that there were three British models which sold more than any others, and that represented only 27 per cent. of the home sales—that is, sales in the domestic market; whereas, in America the equivalent three leading models represented 54 per cent. In 1938 our total production of private motor cars amounted to 342,000, arid of those we exported only 68,257. Of that total production, 62 per cent. were cars of 10 horse power or under and only 34,644 were of the type which has any chance of being sold in the foreign market, namely, cars of 15 horse power or over. In the same year the United States industry produced 2,000,985—and that was a bad year. I am reliably informed that now they are intending to reach their peak, which was 4,000,000, or even get to 6,000,000 in a very short time. Of the few millions the Americans made, they exported 488,650, which, of course, was very much more than the total production of the British industry. However, one of the matters which is so startling, and brings into relief the production figures of the British industry, and the worth of the British product, is that in the same year, 1938, British traders imported from eleven foreign countries no less than 10,800 foreign cars. These were principally from America, but also from Germany, France, Italy and, of course, Canada. In 1937, which was a much better year, we imported no less than 18,000 foreign cars.
1588 Then if we take the value of the imports and exports we get this remarkable figure, that in 1938 the value of all motor vehicles and accessories of all types imported into Britain was £4,500,000, whereas the same figure for exports was only £15,000,000. If one figure be deducted from the other it will be seen how very small was the amount of foreign trade this industry was doing. To complete that picture, look at the figures for the years from 1929, when the value of exports of motor cars was £11,174,000. Ten years later it was only £12,922,000. I come to the present year, and I should like to mention a few prices which exist for new cars in America. At the moment, one can purchase 1942 models—there are some 1941 models, too, but the 1942 models are the latest at present—for between £250 and £300. Generally speaking, they are all of 30 h.p. to 25 h.p. Hon. Members will know what those models are like. Let them compare those models with the kind of models being turned out by our industry now, and with those our industry intends to turn out. Let them compare the prices of the British models with the prices of the American models. I should like to remind the House how prices stood before the war. In 1938 a 30 h.p. Buick, after payment of insurance and freight for bringing it over, cost £500, whereas a 20 h.p. Austin, which, I am told, was the equivalent car, cost £650. I say that it was the equivalent car, but hon. Members who have driven in both makes will be able to judge. A 29 h.p. Chevrolet cost £268, whereas an 18 h.p. Austin cost £350—
§ Mr. Sydney Silverman (Nelson and Colne)
Do those figures include duties?
§ Mr. Shawcross
Those figures include duties. To give one example of this determination to get back to the prewar multiplicity of types produced by large numbers of manufacturers in small quantities—some manufacturers are going even further and are to produce new models of the same category—it was announced in the paper the other day that the Wolseley firm was to produce an 8 h.p. car to cost over £300 without any tax, although we already have a large number of 8 h.p. cars made by different makers. Others are going to produce 6 h.p. cars.
I think I have said enough as to the production side. I now want to turn 1589 to distribution, because it plays a very important part, not only in regard to the use of motor cars at home, but, also, in regard to the industry as a whole. The cost of distribution, that is, the cost which has to be paid by the consumer, and which arises between the factory and the consumer, is in many cases—in most cases, I am afraid—absolutely fantastic. If one buys a car from a dealer for, say, £400, nearly a quarter of the cost, £100, may go in this cost which is mostly by way of discount or commission on sale to the dealer. Generally the car passes through the hands of two or three dealers before it completes its journey from the factory to the buyer. Hon. Members who have purchased cars or have had experience of this business will know whether I am right or not, but I suggest that for that "£100, or whatever the sum is, we often get absolutely nothing. Indeed, in some eases we receive treatment that is so bad, it would be better to have none at all. Why is that? As I understand it, it is because of the enormous numbers of dealers, and what are called stockists. There is no control or regulation, and no qualification which they have to pass in order to deal with cars. To make a living, these people have to be paid an enormous discount. I think there are 13,000 dealers, or some such stupendous figure, and on an average each one sells only about 15 to 20 cars in a year.
Then there is the question of maintenance, which is of extreme importance. By maintenance, I mean servicing and the repair of cars already on the roads. Here again, we have countless thousands of unqualified and badly equipped repairers, and, therefore, we have to pay a lot for repairs—we may get good value, or we may get very bad value—in either case we pay far too much. Is this not a matter which contributes very greatly to the high running costs of motoring, and is it not of even greater importance in relation to road safety? At the outset, in the case of aircraft, laws were imposed, and have been strictly enforced ever since, to make it impossible for an aeroplane to take the air in an un-airworthy condition. There is a law in existence to ensure that motor vehicles on the roads shall be in good order, but, whether it can be enforced or not, the fact is that repairers in the country would be, as they were before the war, quite incapable of undertaking the task. I do not want to give statistics, 1590 but it is known, and it is known to the Minister of Transport, who would confirm it if he were here, that a large proportion of the accidents on the roads are caused by defective maintenance of motor cars. In the case of tyres and spare parts we have the same position, with an enormous number of dealers, many of whom deal solely in tyres. It is necessary, in order for them to make a living, to give them a discount which is something in the order of between 50 to 75 per cent. I want these to be regarded as approximate figures for tyres and spare parts.
What is the cause of this state of affairs which I have described in regard to the industry as a whole? I suggest, first, that there is largely a psychological cause. When motor cars first appeared on the roads—I think is was when a Conservative Government was in power—a red flag had to be carried in front of the motor car in order to retard its progress. That is how it started, and that is how the industry has grown up. There is another psychological aspect to this matter, and that is that, from the outset to the present day, the motor car has been regarded as a luxury, as if it were a yacht or something of that character, not only by the Government, but by people as a whole. It is the opposite of what has happened in America, when, as long ago as 1910, Mr. Henry Ford started, by mass production methods, to produce vehicles for ordinary working people. It was not until 1920 that an attempt was made in this country to produce vehicles in any quantity, and even to this day not a single firm has achieved mass production as it is understood in America.
I want to say a further word about the psychological aspect, because I think that it is important. It may be said that the motor car, instead of being used for the benefit of the people and instead of having the obvious beneficial uses, which I need not mention, has become an instrument of class distinction, surrounded with snobbish barriers from the Rolls Royce downwards; and all sorts of minor rackets have developed, such as producing little metal discs costing about 2d., and getting people to subscribe several shillings a year for the privilege of putting them on their motor cars. I cannot refer to taxation in this Debate and matters that would involve legislation, but the McKenna duties were imposed at an early stage, and it is obvious that from the start the 1591 industry has been protected by its friends in successive governments.
I would say that one of the chief causes of the present state which I have described is the unbridled private enterprise in this country—free enterprise, uncontrolled. How can that be cured? Before suggesting a few remedies, which I want to put forward as shortly as possible, I would like to put these propositions and these facts as some of them are, that in this country we have no firm at the present time capable of competing in mass production with any of the firms in America. Any one of half a dozen American firms is capable of producing, and some have in the past produced, more than four times the number of cars put out by the whole of the British industry. One of the reasons why it has been possible for America to produce cars so much more cheaply than we can is that in America practically every one of these large factories is capable of a line of production sufficiently lengthy to get the full benefits of mass production. Opinion seems to differ as to whether the figure is 25,000, 35,000 or 50,000. Whatever it is, not a single firm in this country has ever reached it. It has reached a figure of production of, may be, 80,000 cars a year, but that is supplying six, seven or eight different models.
§ Wing-Commander Roland Robinson (Blackpool, South)
Will the hon. Gentleman not agree that this magnificent American mass production to which he refers, was created by private enterprise which he is attacking in this country?
§ Mr. Shawcross
It certainly was, but it did not operate under Conservative Governments or anything like that. It operated under entirely different social conditions. I have mentioned one of them. The social conditions in America were entirely different. Everyone knew at once that he had as much right as any one else to have a motor car, and the demand was met accordingly. Although my hon. Friend says there is uncontrolled private enterprise in America, it is in fact, of course, under control. You do not get the rings, combines, monopolies and cartels obtaining in America as a whole. There are the Sherman anti-trust laws. You have the benefit in America of competition between four if not six different concerns. You do not get that here. I hope to show 1592 that the whole industry in this country is riddled with monopolies, rings, combines and cartels.
May I give a few figures to analyse the costs as they operate in the British industry? The claim is sometimes made that we cannot pay high wages in the motor industry because they represent such a large proportion and we must get cheap cars. Actually it is only about 10 or 15 per cent. of the cost, and the overhead and labour charges represent 35 per cent. of the total; all the rest are raw materials, prefabricated parts, components and accessories. Believe me, the motor car factory is hardly a manufactory at all. Most of its work consists in assembling things which are made or partly made elsewhere. Sixty-five per cent. of the cost of the car is represented by the raw and prefabricated material. Over 66 per cent. of the prefabricated material is produced by firms completely under the control of price rings, combines and so on. In fact, one firm—I will not mention its name—controls 88 per cent. of certain types of equipment and components.
With regard to the prices which the public have to pay, I have already mentioned the enormous discounts which have to be allowed in the distribution. On the other hand, when one looks at the profits made by the manufacturers, no figures have been disclosed or can be obtained to show what profit is made on each car whether it is £50 on a £400 car or more I do not know—but we can look at the profits in the shape of dividends. We find that for Austins, one of the largest producers of motor cars, the dividend from 1931 to 1938 varied between 50 per cent. and—in one year, including a bonus£400 per cent. Morris were a little more modest; for the three years 1936 to 1938 they paid 45 per cent., and in 1939 40 per cent.
I come now to the remedies, which I will put as briefly as I can. Although they are entirely my own proposals, I shall endeavour to show later that I am not speaking on my own authority alone, and I ask the House to consider them as worthy of attention. First, the industry must produce the right type of car, and this was well described by my right hon. and learned Friend the President of the Board of Trade as a car which will give good comfort and cheap running. That 1593 is not exactly the American type of car with its large engine, which is not likely to sell very well in any country except the United States because in all of them the fuel costs are almost as high as they are here. The would-be purchaser does not want the present type of American car. Equally, he does not want the kind of cars we have sent him from Britain in the past. Indeed, from some points of view, the 8 h.p. car is nothing more than a joke, a glorified and very expensive toy, but I do not want to dismiss it altogether, because there is a strictly limited but very good market for that car even in the United States provided we produce one model, and produce it cheaply and quickly. I believe we could capture a market right in the United States itself and maintain it for a long time, but not as we are trying to do now by showing a few 1939 8 h.p. models of one make in a New York showroom and hoping that the other six or seven will go along in the future.
That type of car can be produced only by cooperation, and the theme I stress, for the suggested remedies I am about to propose, is and must be cooperation between the manufacturers. They must cooperate and agree upon what is the right type of car, whether 15 or 16 h.p., whether it must have independent suspension on all four wheels or only in front. Surely it should be possible for them to agree to produce a very limited number—it may be three or it might be as many as six—of the type of car which would not only satisfy the foreign user, but would be equally suitable for use at home.
I have dealt with the question of mass production and how it is that we cannot possibly do that at the moment. One has to have at least 25,000, and possibly 50,000, in a line of production of the same model in order to get the real benefit. After that one gets a graph in which the curve's rate of ascent gradually decreases but continues going up almost to infinity. We have not got anywhere near that yet. We must, by cooperation, produce cars cheaply. We have to have the long line of single models, and we can only do that by cooperation, either by amalgamation in the industry or by the sort of distributed production or farming out that was so largely successful in the aircraft industry during the war. That can be done. 1594 Before I come to the question of tax, it seems to me that the attitude of our manufacturers is completely wrong. They say that the Americans are able to deal as they did so successfully before the war in the export market because they have the overspill of home production to satisfy the foreign demand, and they are endeavouring to create in the minds of the public and the Government the idea that that theory applies to British industry at borne. Not only is that wrong, but the exact opposite is the true view, and I urge the manufacturers to reverse their position. What they ought to do is to regard this illimitable world market as the market they would satisfy, and, with the overspill from that, sell cars at what would then be almost ridiculously cheap prices at home.
I mention the tax only to say that I cannot really deal with it, but I wonder whether it has hampered development to the extent which the manufacturers claim. I believe that it has only been done because it has been found to be to the advantage of certain great manufacturers. It has been kept on by their friends in successive Conservative Governments. They have proved it by their attitude to the change which has recently been made from the R.A.C. formula to the cubic capacity formula which is, if it is a change at all, a change which involves equal if not greater vices than the R.A.C. formula did before. The manufacturers should not let themselves be controlled by the Chancellor by this ridiculous formula. Let them disregard the tax. Let them decide on the best models, as if there were no tax, and then produce them and nothing else, and the Chancellor will have to change his ideas because he will find himself losing money. So far as we have been able to ascertain, the trouble is that the manufacturers want to keep either to the old R.A.C. tax or to the new one which has been announced, and they want to do that because they have been making a very good thing out of it. They want to do that and not make the changes I have suggested, because making these changes would necessitate the expenditure of a large amount of capital, re-equipment, retooling, new plant, new factories and so on, and they would rather make a quick 100 or 400 per cent. dividend profit by the shortage which exists at the moment without looking ahead. Those are the first two remedies I propose—the right type of car 1595 produced at the reduced price by the means I have described.
The third remedy that must be applied is to break down the rings and cartels. They should see that the prices for steel and all the components, which are kept up by the rings, are reduced. They should do all these three things, by reorganisation and cooperation—in a word by rationalisation. These are the remedies which I suggest. I am not allowed to suggest nationalisation because that would involve legislation, but I can, and do, say that if ever there was an example of the failure and inefficiency of private enterprise in this country—not America—it is the motor industry. I do not regard that as a controversial statement, because I think that this side of the House is very greatly to blame. I will not go into that, because I have not the time, but we are, as a Party, and now as the Government Party, not at all free from blame in this matter. I do not think the unions who have to deal with working conditions are free from blame in not having brought to the attention of the public this dreadful scandal—because it is nothing less than that—that has existed and grown from 1925 until today.
How do the Government propose to set about this matter? On 15th November the President of the Board of Trade attended a meeting of the Society of Motor Manufacturers. I am not sure that it was not a dinner at which he was entertained. He told them they ought to plan to export at least 50 per cent. of their output. This was not well received at all; in fact there were shouts of "No, no" and "Tripe" and similar unparliamentary language. I do not know what happened after that, but on l0th December I put down a Question on the Order Paper and asked what the President of the Board of Trade proposed to do about the motor industry. He had the Question transferred to the Minister of Supply. So it really looks as if the President of the Board of Trade had come to the conclusion that methods of peaceful persuasion would not avail, and had shifted the burden to the more ample frames of my right hon. and hon. Friends at the Ministry of Supply. Did they try peaceful persuasion? The answer I had was that they would have a meeting, but what they ultimately did was to give up peaceful persuasion and 1596 they decided to institute a system of watching and besetting, and they set up a thing called an advisory council as a picket for the purpose.
That was announced on 10th February and the appointments to it were given on i8th March. That council has no statutory or legal authority or influence at all. Therefore, its influence must depend entirely on the moral authority and upon the intelligence and determination of its individual members. Who are these individual members? The list has been published in HANSARD, but I propose to read it through quickly as I am sure the House will be interested. The first is Mr. R. C. Rootes, who has 19 directorships, including the directorship of a steel pressing company and who is deputy chairman of the Rootes group. Then there is Sir Miles Thomas whom everyone knows. There are Mr. L. P. Lord, managing director of Austins, and Mr. S. Wilks, who is managing director and chairman of Rovers, Mr. R. S. Fryars, particulars of whom I have been unable to find in the ordinary works of reference, and Sir Charles Bartlett, chairman and managing director of Vauxhalls. Then we come to the hon. Member for the Edgbaston Division of Birmingham (Sir P. Bennett). He is the chairman of Lucas's, the electrical equipment people, C.A.V., Rotax, and a former president of the Federation of British Industries. I am very sorry not to see him in his place now, because it would have encouraged me to know that he was there and that he might take part in the Debate.
§ Sir William Darling (Edinburgh, South)
Is it not more usual to warn an hon. Member of an intended reference?
§ Mr. Shawcross
I did take the necessary step of writing to him, although I only realised the fact this morning, but the hon. Member is not in his place. As I said in my letter, I have no intention to criticise him. I have nothing but praise and admiration for the hon. Member personally. I will not go into details—they are obvious from the record to which I have referred—but I think I am entitled to say I was a little startled to see that a Member of Parliament had been appointed, because I had been informed that Members of Parliament were not eligible. If they are eligible, ought we not at least to have one hon. Member from the Government side put on to 1597 this Board? To complete the names on the list, there are a Mr. Black about whom I have found no particulars, Mr. George Wansborough, Mr. Halliwell and Mr. Openshaw, and finally, the joint secretary, Lieut.-Colonel McLaglan, the General Secretary of the Society of Motor Manufacturers and Traders, Ltd. Those names, with one, two or three notable exceptions, consist of the very gentlemen who have been in the past, and still are, responsible for the present state of the motor industry. Having nothing but praise and admiration for them personally for their achievements in regard to the dividends paid by their concerns, I would ask whether they are the type of people likely to carry out, not the reform I suggest, but any reform at all. Are they not, on the other hand, the type of gentlemen who believe that no reform is needed, or, if it is, that it lies in the direction of perpetuating and exaggerating the present tendencies? Are they likely to insist on any change in taxation? Are they likely, in regard to the production of certain models I have mentioned, to rationalise production by long lines of fewer models instead of short lines of a multiplicity of expensive types? It is a case of Quis custodiet ipsos custodies?
I hope that when my hon. Friend replies he will not endeavour to say that he cannot reply to a great many of the things I have put to him because the responsibility now rests upon this Board, and that it would be improper for him so to do. I say that because when I came to try to gather information for this Debate I applied to the Secretary of the Society of Motor Manufacturers and Traders, among many other sources—that is, the joint secretary of this Board. I had a courteous reply, and he gave me many particulars for which I had asked. I wrote for further particulars, and after some delay the public relations officer replied, and said that he thought it would be improper for the Society, in view of the appointment of this Advisory Council, to discuss with private Members of Parliament the subjects I had raised. I had not asked for a discussion, but only for facts and figures, such as how many types were produced by how many makers before the war. No doubt, his attitude was a perfectly proper one to adopt, mistaken though I think it was. But yesterday, 1598 I received a letter, as I believe other hon. Members did, from the joint secretary of the Society of Motor Manufacturers and Traders, asking Members to use their influence to do this and that in regard to the present provision that certain transport vehicles must have six wheels, and they want liberty to make them with four for export. If that is the position, it is nonsense to say that we in this House cannot discuss these matters, and the Minister cannot properly reply, because this Board, the composition of which I have mentioned, is a kind of untouchable body, a kind of judicial body which one cannot criticise or comment upon.
Therefore, I would ask my hon. Friend to deal faithfully with the questions I have put. I have been a devotee of all forms of transport, from small sailing boats to aircraft, for a long time, but the motor car was my first love. Indeed, I first owned one at the age of seven and covered a large mileage in the streets of London under my own power. Since then, I have owned and driven a large variety of makes, British and foreign, and have had much to do with motor cars and the industry in the practice of my profession. But I have not relied on my own knowledge for the views I have put forward. I have consulted with some of the best experts, including the heads of some of the largest manufacturing concerns, and others, who have given me excellent advice. In addition, a great deal of attention has recently been given to the matter in the more serious newspapers. I refer particularly to articles which appeared in "The Times" of, I think, 16th February, and more recently in "The Times Trade and Engineering Supplement" for March. If Members read these, and if they will consult with people in the industry who can give them independent and unbiased views—and there are plenty—they will find that they all come to more or less the conclusions I have endeavoured to urge as to the large scale rationalisation of the industry, and as to the things that manufacturers have to be persuaded or made to do, and which they are highly unlikely ever to do if left to themselves.
I feel that the common people of this country have the right to have cheap motor cars and good motor cars at prices which they can afford to pay. I believe 1599 that, next to housing, the motor car might be the most important material instrument in the social welfare of this country. I believe that it can be done, but that it can only be done, at present or at any other time, by cooperation, and I ask the Government to see to it, either through this Board or by any other means that they may feel it necessary to use, to make absolutely certain that these manufacturers do cooperate to the end which we all have in mind. If they do, I suggest that they will find that, so far from being a question of exporting merely 200,000 cars which we are going to do this year, the export of motor vehicles will become not merely an important export but a tremendously remunerative, profitable and permanent item in our vital trade which will, in the end, make us prosperous and safe.
§ 3.46 p.m.
§ Wing-Commander Roland Robinson (Blackpool, South)
Some years ago I had the honour of sitting for the constituency now represented by the hon. Member who has just sat down, and I feel confident that he will know that I have listened to his speech, through each one of its 46 minutes, with almost a paternal interest. I think his speech was a mixture of admitted facts and conclusions, some of which were good, and others very erroneous indeed.
I take up the hon. Member on his very first point—the question of the possibilities of an export market for the motor industry of this country. To use his own words, "the possibilities are immense, almost incalculable." The possibilities are great, but I do not think that, under the present system, the probabilities are anything like as great as he thought they were. During the last few months, we have been fortunate enough to export to America a fair number of cars, which have, to some extent, captivated interest over there, but I would point out very forcibly that I believe that this is only a temporary phase. It is fairly easy at this time to build up exports in almost anything, because the world is short of goods and people all over the world will eagerly grab anything that is going, and will gladly pay for it. That is why, at present, we are able to sell cars in the United States, where they have a tremendous shortage and where anything on wheels, 1600 that will go and has an engine in it, will be very gladly bought. But, if we are to continue to keep that market, then we have to ensure that our product is one which will have appeal both on performance and on price. This country, from now on, if it wishes to secure export markets, will have to produce the car of performance which sells at the right price.
I think our motor industry has made a great mistake in making, as its first slogan, "Buy British." Our motor car industry will only succeed if we can tell people that, by buying British, they are buying the best and not merely being patriotic. I remember that, some time before the war, I went to a dinner given by a motor manufacturer who was launching a new model in this country. He gave a dinner to which large salesmen were invited, and I was asked to go along as his guest. I sat on the right hand of the motor manufacturer, who made a speech and afterwards said to me, "Well, what do you think of that?" He was very angry when I said, "I look forward to the time when we can sell British cars on merit, and not merely because they are British." If the Government do want to help, let them give encouragement in order to improve the general standard of our cars. I do not believe that we shall ever succeed in capturing the export markets of the British Empire and of other parts of the world, while we continue to try to sell cars which are of low horsepower. After all, we have to recognise that distances in this country are comparatively small. If we are to sell cars in Canada, the United States, South Africa, India and Australia, we must produce a car capable of handling the big distances, and that means a very much higher horse-power. We cannot live on exports alone. It is axiomatic that a strong export market needs behind it a very good and lively home market. I believe that such a market can be created in this country.
The hon. Member for Widnes (Mr. Shawcross) raised another point which I should like to take up. It is absolutely wrong that the Government should have in their minds the idea that a motor car is a luxury to be retained for the few. It is a necessity, and the more people in this country who have the privilege of owning a motor car the better it will be. That is the situation in America. I could not agree with the hon. Member for 1601 Widnes in his statement about America. After all, the big American motor car industry was built up entirely by private initiative and free enterprise.
§ Wing-Commander Robinson
Certainly I will add competition. It is good in America, and it is good in this country too.
§ Wing-Commander Robinson
Competition and free enterprise will return to this country when we on this side of the House are in power once again in a few years' time. Until then, I cannot see it returning. The hon. Member for Widnes referred to the American citizen. He is given cheap motor cars in tremendous quantities and of good quality under a system of private enterprise. Because it was in America, the hon. Member thought that was all right, for in America there were no rings and cartels, and so on, but he said that in England things were entirely different. I do not think we should take that view. If that system is successful there, it can be successful here. Some years ago, when I had completed my studies at Cambridge, I went to America to have a look at what there was in that country. One of the first impressions made on me on visiting the industrial areas was that every factory I went to had an immense parking place because everyone in the factory went to work in his own motor car. Every man, whatever his job, expected the standard of living to be high enough to enable him to purchase and run a motor car. He expected the price to be low enough to enable him to have a car. That is a system I would like to see in this country. We ought to have good and cheap cars so that every working man would be able to own one, in the same way as the working men in America. Unless we have some system of reform, perhaps more in the Government than in the motor industry, we shall not reach that stage.
At present we do not produce enough and, therefore, the price is higher than it would be under the American system. It is made higher still because the Government put a monstrously high Purchase Tax on cars and fuel which has the effect 1602 of denying the working man in this country the right to use a car. If we can reduce these charges substantially, the motor industry will grow to an unprecedented size and the revenue received by the Chancellor of the Exchequer will go up with it. We ought to rely on the principle of smaller profits and bigger returns. Of course, if more people had motor cars it might be a source of worry to the right hon. Gentleman the Minister of Transport because he would have to produce bigger and better roads such as many of us have advocated for a very long time. But do not let us follow the many erroneous conclusions which have been drawn by the hon. Gentleman. Let us run the industry so that we can produce a cheap car with a high horsepower and good performance, which will not be made expensive by overtaxation by way of Purchase Tax, Road Fund tax, or by too heavy a tax on fuel. If we can do that and supply the cars to the people, we shall have a prosperous home market on which we can base a great export market to capture the motor trade of the world.
§ 3.56 p.m.
§ Mr. Pargiter (Spelthorne)
I will not detain the House very long having regard to the time, but there appears to be a good deal of confusion on this question of horse power. The American high horse power indicates, very largely, high consumption, and the nominally much lower horse power car in this country has a relatively higher performance. I do not think we ought to talk down our own products to the extent that we do. Within the limits of their classes they are very good cars indeed, and it is also true that, taking the run of any roads in this country, comparing the high-powered American car with the average English nominally low horse power car, one will find, having regard to the general conditions, that one reaches one's destination as quickly in the small car as in the large one. That is an important factor in motoring—the time it takes to get anywhere. While there may be an excellent case for saying that we want a standard model for export purposes—that they may have to be of a different standard and of higher horse power, and so on—there is no particular case to be made in this country for making cars of a high horse power, with their consequently large and uneconomical consumpton, because one cannot get the full performance out of the car. That is a 1603 factor which has always been borne in mind by the designers of cars in this country. The heavy commercial motor vehicle industry in this country produces vehicles which will sell, if given the opportunity, in almost any part of the world, and are of a quality which no other country produces.
What is needed above all is some degree of rationalisation of the engineering industry as a whole, because we must recollect that the motor car industry is not a specialised specific industry on its own as such. It is one of the material users and one of the channels of consumption of the engineering industry as a whole. It seems to me that the Minister of Supply is putting the cart before the horse in attempting to set up an advisory committee to do something in this industry without looking at the engineering industry as a whole, and in not doing something about the supply of raw materials which will be vital if anything is to be done to bring down the cost of motor car production in this country. Steel costs, which have formed the basis of the prices in the motor car industry, are notoriously high, and, no matter what is done, we could not compete with America because our raw material production will not let us do it. We have to think in other terms. If we could have some degree of rationalisation of the industry as a whole, if a committee or some organisation could be set up to deal with engineering, we might be getting somewhere. I hope the Parliamentary Secretary will he able to deal with this question of the people who are alleged to be looking after the motor car industry. Among members of the National Advisory Council are persons in a privileged position, one of them being the chairman of what is almost a monopoly on the accessory side. In addition to that, we have so many diverse interests represented on that Committee that in the end they will probably only agree to differ.
§ It being Four o' Clock, the Motion, for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, "That this House do now adjourn."—[Captain Bing.]
§ Mr. Pargiter
I feel that a greater effort must be made for the industry as a whole. 1604 We must have the rationalisation that is required brought about by a more effective body than the body now dealing in it, which will probably end with a degree of masterly inactivity. They will find that, through conflicting interests, between the heavy commercial side, the light commercial side, the light car side and the accessory side, it will be practically impossible to give any sound advice at all. That may be what the Department wants, but it certainly is not what the country wants. We want motorcars at a cheap and reasonable price. We want them of a quality not less than the present quality, and we want an increasing quantity. We want something which will compete in the markets of the world, and take advantage of the great demand at the present time. I hope something will be done to assist this, one of our major exporting industries at the present time, so that it can bring prosperity to this country, not only for the industry itself but for the benefit of the people as a whole.
§ 4.2 p.m.
§ Air-Commodore Harvey (Macclesfield)
I agree with some of the remarks of the hon. Member for Widnes (Mr. Shawcross) but not with all. I feel we should take into account the fact that very few motor cars have been made in this country during the years of the war. We should pay tribute to the industry for the job of work it did during the war, in making aircraft engines, and working on other forms of engineering. I believe the motor car industry has a great opportunity, particularly in places like Holland and Belgium where there are no hills, and where there is an opportunity for the small car to which the hon. Member referred. I agree with him that the types must be few in number. There are far too many light cars made. The ideal would be a car of somewhere around 18 horsepower, which is well sprung, well cooled, with the suspension well raised from the ground; a car which would be suitable for the Far East, and for all the other markets overseas.
When I lived in Hong Kong some years ago, I had a British car which always boiled on going up the Peak there, which was 2,000 feet high. I will not mention the make, because the firm in question is now producing a quite good car. The manufacturers should send their representatives out to these places to explore the markets in detail. My 1605 experience in watching the British manufacturers sell their cars has been that they sit in the large ports like Hong Kong, Shanghai and Singapore and expect the orders to come to them. These men should travel up country and sell their cars direct to the Chinese, Indians and others. There is an enormous market for trucks in Southern China. My information is that General Motors are, at the moment, capturing the whole of that market. It would pay manufacturers to go out in a big way to capture this overseas market. Do not let us criticise the industry too much. It has done a good job of work. I feel sure that if it were given encouragement, and if the bottlenecks could be removed, if allowed to trade freely, it could go ahead and assist to acquire the exports we require so much.
§ 4.4 p.m.
The Joint Parliamentary Secretary to the Ministry of Supply Mr. Woodburn)
We are grateful to the hon. Member for Widnes (Mr. Shawcross) for raising this matter, because bringing these things into public discussion clears up a great many misunderstandings which arise on various points, even between the two sides of the House. I do not propose to enter into the polemics of the arguments developed between my hon. Friend the Member for Widnes, on the one hand, and the hon. and gallant Gentleman the Member for Macclesfield (Air-Commodore Harvey), on the other. I shall have to leave them to tight that out later in private. I think we must recognise that when we are dealing with the motor car, we are dealing with one of the fundamental steps forward in civilisation. There is a very fine exhibition of aircraft on just now in the South Kensington Museum, where there is an exhibit showing the progress of mankind in terms of transport, from the simplest roller, on which the stones for the Pyramids were carried along, right through all the stages up to the aeroplanes of today. The motor car has contributed more to making man mobile than any other form of transport, and the only thing which, so far as one can see, will replace the motor car in the future is the helicopter, because it is not confined to the roads but has a three-dimensional method of transport. I have no doubt that eventually farmers and people in isolated areas, will be able to take the air and go as the crow 1606 flies to their destination. At the moment however we are dealing with the immediate thing, which is the motor car.
Some criticism has been made of the industry, and I daresay the industry itself would say that some of that criticism was justified, because we are all much wiser after the event than we were before it. Henry Ford had the advantage of sitting down and planning something which he was going to build. It took him a long time. The motor industry in this country was not planned; it grew like Topsy, in a field of private enterprise where everybody was experimenting and pioneering in order to show how he could do better than the other fellow. I want to say quite frankly that there is a stage in society, and in all development, where there is a certain amount of virtue in leaving people to find the best road for themselves. The industry developed and there was plenty of room in it for that pioneering spirit but, of course, under private enterprise, it led to a variety of product, which again led to competition, and soon competition reached the point which it reaches in all development—the market became too small for the productivity of the industry. Thereupon, there came all kinds of stimulants to produce over-consumption of cars by the usual methods, first of hire purchase, which is a quite justifiable method, and secondly by changing the fashion in cars, as the dressmakers do with ladies' dresses, in order to persuade some people to have a new car every year, so that the old one was passed down until it reached the scrap heap in due course.
There comes a point, however, when an industry, if it is to succeed at all and not commit general suicide, must have some sort of rationalisation, and that normally takes place along the lines of the cartels and the trusts. When it reaches that point, then it comes into conflict with the public interest. As my hon. and gallant Friend said—
§ Mr. Shawcross
On a point of Order, Mr. Deputy-Speaker. Hon. Members keep referring to me as "hon and gallant" It does me a lot of harm.
§ Mr. Woodburn
I am sure my hon. Friend is gallant, whatever his official description
When it reaches that point, then the community itself has an interest in seeing 1607 that it is not exploited by such an organisation, and that some sort of proper rationalisation is introduced. However, there is this to be said, the motor car industry itself has been driven, by the very necessity of expanding its market, into continually increasing its efficiency and reducing the cost of its product, and from that has grown the gradual reduction in price of the cars that have been put before the public. It is now almost a matter of a mathematical calculation as to what would be the maximum market, or the minimum market which would give maximum production at a proper price. That point can be reached; it is the saturation point. This can he estimated by mathematical calculation That brings in the question whether this end can be achieved with the huge variety of cars we have today. They cannot all reach that point of maximum production. Therefore, the industry is faced with the choice between a variety of cars and a reduction of that variety until we have one or two standard models.
It would be wrong for us to decide today that there is anything specially wrong with variety. "Variety is the spice of life" and I hope we shall never come to a monotonous uniformity in everything we do in this country. Moreover, variety stimulates invention; it stimulates art; and it stimulates higher standards If we have monotonous uniformity we may have no break through the monotony, and we may have no improvement. That we made such progress and achieved such success in the war, both from the mechanical point of view and from the point of view of the contribution of ideas, was largely due to the fact that we have the necessary amount of variety in this country to stimulate competition in ideas and emulation of the highest standards.
Whatever may be the faults of the motor industry, these have been due to its history. I should like to pay a great tribute to its achievement. It may have grown up like Topsy but it has certainly accomplished something. Prior to this war it was producing£100 million a year, and about 16 per cent. of that went in exports. The development of that£100 million industry made it the largest single engineering industry in this country. It developed tool making and a skilful method of production that was of in 1608 estimable value to us during the war. Had it not been for that we should indeed have been in a sorry plight. It would be wrong to say that the only thing that helped us to win the war was the ability to "mass produce." Indeed, it was the fact that we maintained a special quality in our motor cars, for instance, in the shape of the Rolls Royce, that gave us a high quality in engines, and that brought us to the forefront in the production of aeroplanes. Therefore: I do not think that quality and quantity need be mutually exclusive things, and we must do our best to maintain both. As far as the Government are concerned, we regard it as a national necessity to maintain in this country the spirit of experiment and development and to see that it does not become stagnant.
Criticism was made of present cars. It is true that the industry is producing 1939 cars. Obviously, during the war there was not the opportunity to produce new designs or to put new designs into circulation. For my own point of view I think it would have been wrong during the war, when we were making so much progress in engineering, to have made a hasty decision as to what was to be the model to be put on the market eventually. I think that is a thing to which great thought should be given. When it is produced, it should be the finest product this country can turn out. But in the meantime this country is desperate to secure the immediate production of goods which will help us with our exports.
§ Mr. Shawcross
Would the hon. Gentle-man explain how it is, then, that the Wolseley company has announced the production of a new 8 h.p. car? He said there had not been time to produce new models.
§ Mr. Woodburn
I could not say offhand, but from what I know about engineering I should think it would not be as new as it would appear. Sometimes a new model is an adaptation of something that has existed before. This model might have been developed from a former 10 h.p. car, or something of that kind, or it may represent the Wolseley company's way of putting a cheaper taxed car on the market. You certainly cannot start production of a new car in less than two or three years, and there has not been time to produce an entirely new model since the war ended. In regard to the 1609 Industry's contribution to the war effort 80 per cent. of our peak aero-engine production was carried through by the motor-car industry. That is a very great tribute to it. Before the war, there were 225,000 people engaged in the industry, but before it had ended the industry's manpower had increased to 500,000 workers. These facts indicate the importance of the industry so far as Government planning of industry and manpower is concerned. It is because of this importance that the Minister has set up a National Advisory Council for the motor manufacturing industry.
I think there was a little misunderstanding on the part of my hon. Friend about the purposes of this Council. The word "Advisory" ought to have given him a clue. This is not a council or an organisation formed to dictate or run the industry, but an advisory council intended to guide and advise the Minister as to what action he should take. We hope to have valuable advice from this Council, and, if we have it, the Minister will take it. If not, it will be like the old Scotsman who went to the doctor and, having been sounded, asked the doctor how much it would cost. The doctor told him that it would cost him half a crown. "What is that for?" asked the Scotsman. "It is for my advice," replied the doctor. "I am not taking your advice, so it will cost me nothing," the Scotsman replied. The Minister may or may not accept the advice of this Council, but we are looking forward to having advice which will be worthy of acceptance. My right hon. Friend has invited qualified men from various aspects of the industry to consult together as to the best policy in the service of the public and national welfare.
I should like to pay a tribute to all sections of the industry, who have shown obvious willingness to cooperate with the Government in an endeavour to secure the best results for the country since these ideas on planning, manpower and production were introduced. I will give the House an example. Recently, the workers in the engineering industry, of their own volition, approached the Government and put forward constructive ideas to the Minister as to what they thought ought to be done in the planning of the industry. The Minister was favourably impressed by the representations, and the matter is being pursued. The engineering industry 1610 is such a varied and enormous industry that, obviously, any Council for the engineering industry must have general terms of reference. The motor car industry is a specific thing, with a specific purpose, and as such its problems are much easier to deal with than the larger and wider problems of the engineering industry as a whole, but the two matters are proceeding simultaneously and no preference is being given to the claims of any one section. We hope that this cooperation will continue. If the workers and managers of the industry can avoid the temptation to exaggerate their differences, and can put them into their proper perspective in relation to national need, I am certain that this industry, with the cooperation of workers and managements, will accomplish something of which this country can be proud. We hope, with the knowledge engineers have of the dangers of friction, that they will introduce the lubrication of good will, so that the industry may proceed with the maximum rapidity and with the minimum of heat.
There is no intention on the part of my right hon. Friend to tell industry how to run its business. Neither the workers nor the managements in this country respond kindly to hectoring or lecturing from outsiders. I think that harm has been done and irritation caused by undue talking to people in regard to the things about which they know far more than the people who talk to them. Therefore, this Council is composed, not of people who know nothing about the industry, but of people who know the industry thoroughly. It is impossible in the engineering industry to find people outside it who know as much about it as the people inside it. If we take the people inside it, we are taking the people who have been responsible for the industry in the past and are responsible for it at the present time. Therefore, we believe that technical qualifications will far exceed any political deficiencies which there may be, and it is technical qualifications that will be considered. The hon. Member for Edgbaston (Sir P. Bennett) is on this Council, not in his capacity as Member of Parliament, but because of his technical efficiency in the industries with which he is connected, and to which my hon. Friend himself paid tribute.
The State, of course, has a responsibility, and my right hon. Friend, now responsible for the engineering industry, 1611 must accept the responsibility of seeing that this industry is efficiently conducted within the limits of manpower that are available in the country. Our most valuable asset today is our skill and our manpower. We must make the maximum use of both, and every possible step must be taken to avoid any waste in either of these directions. The motor industry is one of the most vital industries for the expansion of exports, which must receive special attention from the Government in the present crisis. That means that we have a change of purpose in this industry. It is no longer an industry which caters for luxuries. It has to provide two functions in the community. It has to provide the transport for the factories and individuals in the country. Secondly, it has to furnish the nation externally with the commodity money with which we can purchase our vital imports from abroad. I am very pleased to pay tribute to the industry for the response which it has made since the war to the Government's request that it should expand exports to the maximum. At present the industry is exporting 50 per cent. of its cars and 33⅓ per cent. of its other motor vehicles. I think that that is greatly to its credit.
So far as the Advisory Council is concerned, my right hon. Friend proposes to ask it for advice, as he has intimated to the House, on the location of industry, exports, imports, research and development, design and technical development, and on production methods. We propose to invite consideration of the following propositions: That the industry must increase its production; it must secure the maximum output with the minimum of labour power, which means the elimination of waste in production. In that regard it must eliminate possible unnecessary man-hours, possible unnecessary overheads and possible unnecessary development of sales organisations, as my hon. Friend the Member for Widnes has suggested. It must concentrate on fewer varieties of bodies. We certainly propose to ask the industry to pay very special attention to the question of multiplicity of bodies. That, of course, leads automatically to the necessity of more standardisation, but variety of models does not mean that every part in every car must be different, and within different models there can be a great amount of standardisation.
§ Mr. Shawcross
Will the hon. Gentleman agree that at present there is very little standardisation?
§ Mr. Woodburn
I would say that there is far too little. There is some. The hon. Member for Edgbaston has managed to establish in his industries quite a lot of standardisation, for example in lamps, batteries and things of that kind. Then there are examples of which we have all had experience—bumpers, which seem to be fitted to a car as an ornament. The safest thing is not to bump with one's bumpers because it may do more damage with them than without them. My own experience is that my bumper usually gets locked in that of the other car and it takes a jack and two or three people to get them apart. Obviously, it is ordinary common sense that bumpers should bump and should touch those of the other car and not smash in the other man's mudguard. I am sure this has only to be brought to the attention of intelligent car manufacturers for it to be put right. Standardisation in such things would help to prevent accidents.
Jacking systems are as bad. I was once out in a Government car with a very senior air officer on an urgent job when, for some reason, the car broke down. The jack, of course, would not work—it had to go under a bumper that could hardly support itself, let alone a jack. There we were on important business, out on the road trying to get a car back "on to its feet." Lorries came along but naturally their jacks were different. It seems ridiculous that in a simple instrument of that kind there should be such a multiplicity of types. The same applies to nuts and bolts, wheels and attachments; standardisation in all these things would lead to fewer delays and economy in stocks and spares—a very important point as my hon. Friend said—and to better conditions of servicing.
We wish for the cooperation of the whole industry in improving itself and we do not intend to enter into argument with it. We mean to leave the industry in the hands of private enterprise and we are willing to help private enterprise to help itself and to realise that, whether private or public, it is part of the common organisation of this country for the benefit of the population. We want to use all our common agencies in order to achieve maximum efficiency. When we have se- 1613 cured our livelihood by purchasing the things we need from abroad, then undoubtedly a great function of this industry will be to supply cars to the ordinary people of this country. We hope that the industry will expand in such a fashion that anybody whose particular liking for spending his leisure is to be found in a car, or who needs a car for his domestic or public purposes, will have no difficulty in obtaining one at a price which he can 1614 afford to pay. That lies a little in the future, but we shall work towards it and we expect the cooperation of the industry. Otherwise the community will bring its reproach with justification upon the industry.
§ Question put, and agreed to.
§ Adjourned accordingly at Twenty-Eight Minutes past Four o' Clock.