§ Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Popplewell.]
§ 10.42 p.m.
§ Mr. George Thomas (Cardiff, West)
On 26th June I addressed a Question to my right hon. Friend the Minister of Supply concerning the distribution of new cars in this country. The Minister in reply said to me:I agree with my hon. Friend; I believe that there has been a measure of abuse in this matter, though I think it has been considerably exaggerated."—[OFFICIAL REPORT, 26th June, 1950; Vol. 476, c. 1883.]And in reply to my hon. Friend the Member for Ladywood (Mr. Yates), he further added that where there are advertisements of these almost new cars for sale as second-hand cars, they are rarely to be obtained when the customer comes along to the shop.
That Question and answer created for me a volume of correspondence from people in all parts of the country, and it is quite clear that there are unpleasant practices in connection with the distribution of new cars. In a period of scarcity everyone appreciates that he must take his place in the queue, but when people have an idea that there are queue-dodgers who are able to get to the head of the queue, and have as many as three or four new cars, whilst they are still waiting to obtain one car, a sense of social injustice is created which damages the system of distribution itself.
I will quote a letter from Birmingham. I do not know whether it is from the constituency of my hon. Friend the Member for Ladywood who has taken an active part in this matter. The letter says:I can at this moment walk round the corner of the road and buy a car, 1949 Ford Anglia, for £200 above the cost when new.And from my own constituency I have received a letter from a man who says that his grievance is that he feels he is not having a square deal when he can see 1507 certain doctors who have had as many as three new cars during the past two years.
Perhaps the best letter I received came from Scotland. With one exception, where the writer is not so polite as he might be about the Minister—and I will not read that part—this is an extremely fair letter. One garage alone, he says, about 20 miles from his home, has sold about 30 of these new cars in the last few months. Immediately the covenant of one car ends it is on the market; and, what I think is significant, is that 80 per cent. of these sales were of cars of English registration.You can inform Mr. Strauss,the letter goes on,that if he buys a copy of the 'Autocar' he will see hundreds of 1949 cars for sale. When cars are so scarce they should be put on points.That is his suggestion, not mine, because if I raised it I might be outside the rules of order. This correspondent speaks of his sister's inability to obtain a car at all, and here is a case where any hon. Member could justify an appeal for this lady to obtain a car; but she could have one of these almost new cars if she paid almost double the price of a new car.
That is the injustice of which I complain tonight. People who can afford it can obtain an almost new car at an inflated price. The price, of course, is always inflated in these cases. The present system of distribution means that an allocation is given to the dealers and distributors on a percentage basis fixed on the number of cars sold in 1938–1939, and the authorised dealers also make an allocation to casual traders who have no contract with the manufacturers. They draw up a list of those who have ordered a car. The trade is No. 1, and there is a medical priority for doctors and midwives. We all appreciate the needs in these cases, although uphappily it is true that there are doctors who have exploited the privilege of their priority, getting three or four new cars and making a profit. When one sells one's last new car one gets the next for nothing, having made sufficient profit on the others at a period when there is an unnatural priority for some people over others.
1508 Then comes the question of the private car. There is nothing stopping the anti-social or selfish person from putting down his name for four different makes of car. The lists are drawn up separately for all the different makes and in this way some people are obtaining four brand new cars in a short time whereas the waiting period for the average citizen is about four years before getting a car at all.
The number of hon. Members who have come to me since they knew that I had obtained this Adjournment and would raise this matter saying they have waited for a car for three or four years, ought to disabuse the minds of the public that hon. Members of this House have any priority whatsoever; because there is a mistaken idea about this in the correspondence which comes to us. I can give the registration numbers of cars con-concerned, the names of the persons, and of the dealers connected with the sale of a number of new cars in the past few years. But I make certain suggestions.
There are men who have been approached as soon as a covenant runs out with the offer of being given a brand new car without paying a penny. The dealer, for his part, is pleased because he makes £200 or £300 profit on selling a second-hand car. The customer is pleased because he has a brand new car himself. The only person who is not pleased is the poor fellow who cannot break into the ring to get a car to carry on his business or his livelihood whatever it may be. Trade journals are advertising cars even before the covenant has expired. If payments have not been kept up, the car is taken and the trade is making a profit in this instance.
My suggestion is that the Minister of Supply might use his influence with the trade, and ask the trade if they will require dealers and distributors to give lists with the names and addresses of people who have ordered new cars. Those who have ordered cars can be notified direct from the distributors when their cars go to the dealer, and the dealer, as has happened in some instances, should publish a full list in their shops of people waiting for cars, with their places in the queue, and should strike off the names at the end of the month as cars are delivered to people. This would give a new sense of confidence.
1509 The trade are blaming the export drive, I believe, for their present difficulties. I wish there could be more cars on the home market although I am grateful for the contribution that the motor industry is making to the dollar drive. There can be no excuse if there were only half a dozen cars on the market for dishonesty in the methods of distribution. The present shabby system of supply is placing a premium on dishonesty, and I earnestly hope my right hon. Friend will appeal to the trade to deal with this matter.
§ 10.52 p.m.
§ Mr. Yates (Birmingham, Ladywood)
I am very grateful to my hon. Friend the Member for Cardiff, West (Mr. G. Thomas), for having raised this important question. When he raised it originally I also put a question to the Minister and called his attention to the very large numbers of 1949 models which were being advertised. Like my hon. Friend, I have had several communications about this matter. One of my constituents wrote to me at the time I put the question and said:I have saved all my life to get a car. I put my name down on the rota of a Birmingham agency on 1st June, 1947. I have made several inquiries personally and by letter.He then goes on to send me a communication from the firm, also a firm in my constituency, that they were very sorry to think they could not do anything about it, whilst the very car he was asking for was being advertised in the Birmingham Press by the very same firm, and more than one 1949 model was also advertised at an enhanced price. I had a letter only this morning from a constituent which said:As an ex-Service man, who at the end of the war was on active service in the Mediterranean, I was unable to place an order for a new car until my return to this country at the end of 1947. By this time all the waiting lists for new cars were filled up and although I have now had a new car on order for three years, the dealer with whom I placed the order is of the opinion I will be extremely lucky if I get it before another three years has elapsed.I want to call my hon. Friend's attention to the very large number of cars which are being advertised, even in the London "Evening News" tonight. I see advertisements for Austin A.40's, 1949 models—which according to the up-to-date price list is £505—being sold at £875. 1510 In the "Birmingham Mail" last night there were several advertisements for, among others, the A.40 Devon saloon for £875, which is £375 in excess of the list price for a new car.
I think it is an absolute disgrace that this kind of racket should continue. I am informed that these Austion A.40's are being manufactured by the Austin Motor Company as fast as it is possible to meet the overseas demand, and in present conditions it would be probably 10 years before people could get one. How comes it, then, that 1949 A.40's are being advertised, not only in London but in Norwich and in other parts of the country? I ask my hon. Friend to consider this matter. I am sure from correspondence that I have that prospective buyers would feel that there was a greater sense of justice and fairness if the covenant period were extended beyond one year. I would not suggest three years; I think that is perhaps too much; but I think it should be extended to a period of two years. [HON. MEMBERS: "Three."] Well, three then. Many think that is a reasonable period. In any case, I think it is eminently reasonable that there should be a two-year period.
Could not my hon. Friend suggest to the trade that some such arrangement should be arrived at in the public interest? I think that at the moment these people are living almost in a "spiv" car dealers' paradise. It is our job and our duty in this House of Commons to take every possible step we can, and to suggest to the Minister that, in consultation with the trade, this very serious racket should be ended and a more reasonable arrangement come to in the interest of the community.
§ 10.57 p.m.
§ Sir Peter Bennett (Birmingham, Edgbaston)
It is very refreshing to have such a testimony paid from Members opposite to the efficiency of price maintenance organisations. I was attacked the other Friday when I was trying to defend them. Hon. Members opposite now suggest what a marvellous thing the covenant system is, and I hope they realise that that is done by a price maintenance organisation. The hon. Member for Ladywood (Mr. Yates) says the only fault is that it is not extended so that there is more of it. I should just like to put that on record, because this is purely a volun- 1511 tary arrangement made by the industry itself. Of course, I sympathise with every word said tonight. My life is made a misery, as is that of anybody else who knows anything of the motor industry, by people I meet coming to me and asking whether I can help them get a car.
I shall not take more than a few minutes because I do not want to rob the Parliamentary Secretary of the opportunity of telling us how this is to be done. I am certain the industry would like to know whether he has got any sugestions. The Ministry have tried once, remember. I do not know whether the hon. Member for Cardiff, West (Mr. G. Thomas), knows that the Ministry of Transport tried to do this; they tried to issue permits, and had 100,000 applications; they could not open them; they could not deal with them, and so they said to the industry, "Please do it yourselves. We are beaten." I know, because I applied and I was told that I could have a car. I went through the motions, but I could not have the one I wanted and I was told I should have to have something else. In the meantime the firm to whom I applied said it was all right; they got the permit and I had the car. Weeks afterwards the Ministry of Transport told me I could not have one. I am not blaming the Minister; he could not do it himself; he had to rely on the staff and the staff could not do it. I pity the Ministry of Supply if they begin to try to allocate cars.
§ Sir P. Bennett
Or to get any scheme out. Let hon. Members not blame the export drive. The industry is sending 75 per cent. of its output abroad. That means that at present there is something like one million cars on order, while there are 100,000 allocated to the home market. The covenant system is a voluntary arrangement to prevent a buyer getting a new car, and then getting rid of it immediately. The whole problem is a very difficult one for the trade, but after all, it is something which occurs in all cases where things are in scarce supply. Why not go for the people who sell houses at £3,000 and £4,000? It is impossible for any ministry or organisation to find a perfect system in a world 1512 of such shortages. The industry does its best, and the Parliamentary Secretary will perhaps tell us what the Ministry propose to do in the future.
§ 11.1 p.m.
§ The Parliamentary Secretary to the Ministry of Supply (Mr. John Freeman)
If the hon. Member for Edgbaston (Sir P. Bennett) had not sat down, but had prevented me from having time to reply, neither I nor the House would have complained, because he is as much responsible as I am for the subject under discussion. I hope I shall not be ruled out of order if I start by making it plain that the Ministry of Supply have no control, or power of control, over the distribution of cars in the home market at present. Nevertheless, we have been in close consultation from time to time with the trade. The leaders of the trade have been, on the whole, most co-operative in acting in accordance with our suggestions, and it is right that I should inform the House of our views.
I must start on the assumption that the ratio of motorcars that go for export and motorcars for the home market is as it is. We cannot argue that tonight, although, no doubt, it is a suitable subject for debate another time. In those circumstances I would add this: a further limiting factor, not on distribution on the home market, but on the total output of cars, is the shortage of sheet steel; and it is fair to the industry that that should be made plain. At present we are obtaining every ton of sheet steel we can find anywhere in the world, and not until the middle of next year, when the new mills in South Wales come into production, shall we have an easier position. When we do, whether the allocation of motorcars to the home market increases sufficiently to solve this problem will depend on many things; but it would be reasonable to express the cautious hope that by the latter part of next year, when sheet steel is sufficiently plentiful to enable the motorcar industry to obtain full production, we ought to have circumstances in which this problem is far more likely to disappear than it is today.
The complaint about the distribution amounts to three charges. First, that the people who need cars most are not necessarily getting them; secondly, the wrong people are getting them; and thirdly, in some cases, some people are repeatedly 1513 getting post-war models by turning in the ones they have at present. Without discussing the question of whether the Government ought, or ought not, to attempt to impose a statutory control, which in any case would be out of order on the Motion for the Adjournment of the House, the arguments about centralised control apply equally whether imposed by the Government or by the industry.
As the hon. Member for Edgbaston has quite rightly said, the complexity of achieving control in individual cases, either by Statute or with the co-operation of the industry, is so great as. I think, to rule it out of consideration as a practical proposal. At the present moment a very limited priority is being given by the trade to doctors and midwives. The trade—and in this I am in full agreement—are against extending that priority to other classes. If you open the door wider you will quickly get a state of affairs in which the whole allocation of cars on the home market is sucked into the priority classes—classes, mark you, not necessarily discriminating between individual needs—and the damage done and the hardship caused might well be greater than that which exists now. The task of establishing priorities all over the country as between individuals is really an impossible thing to do centrally. I cannot imagine what the cost would be if anybody attempted to do it.
We have weighed all this carefully in the balance, and we have come to the conclusion that there is no better way of distributing motorcars on the home market than by leaving the final discretion as to individual distribution in the hands of the local dealer, who at least is in the position of having a good deal of local knowledge—which cannot possibly be available to any kind of central register—about the choice between one individual and another, very likely in the same class of user.
Now as to the question, which both my hon. Friends raised, about the cars which are quickly sold as soon as they are outside the covenant period. I am not satisfied, on the information which I have at present, that the abuses of the covenant, or the number of sales which take place immediately after the covenant period, are as great as has been suggested. As regards the covenant itself, the British 1514 Motor Trade Association has been vigilant in watching for breaches, and has taken legal action successfully on a number of occasions. At the beginning of this year my Department wrote to the Association and suggested that, in view of the relatively small number of cars coming on to the home market this year, there might be grounds for extending the period of the covenant, as the hon. Member for Ladywood (Mr. Yates) suggested, from one year to two years. The Association carried out a market research survey as to what was happening to these cars at the end of the covenant period.
I have studied that survey. It is admittedly incomplete, for various technical reasons that I have not time to go into—the sample was not of such a nature as to make the figures infallible—but such as it is, the figures showed that within 15 months of the signing of the covenant not more than 2 per cent. were being turned in. Let us accept that the figures are not quite accurate, and that the real figures may be a little higher, and let us accept that as you extend the survey further from the signing of the covenant, the figure will be greater. It will still be obvious that this is not the national scandal that has been alleged.
We have asked the Association to keep this matter under review, and they are now extending their survey to a period up to two years after the signing of the covenant. We will see what figures and what results they get. I am bound to say that in my opinion it would be advisable if they accepted the suggestion that has been made by us, and is now made in the House by my hon. Friend. I know they are considering it. I do not think that in terms of actual numbers the difference it will make will he very great, but I do think it will go some way towards giving the public greater confidence than it has at the moment about the effectiveness of the distribution scheme.
Let me end by saying that the essential difficulty of this problem is that the number of cars coming on to the home market is insufficient to satisfy the public, however these cars are distributed. I do not believe that the difficulties and abuses of the present scheme are as serious as is sometimes suggested, though I recognise that the situation is extremely 1515 irksome. No system of distribution in the present circumstances could remove the dissatisfaction, and having given all the consideration that I can to it, I am doubtful whether any system, however cumbersome or costly, would be a substantial improvement on the present one. I hope those people who have waited for years for cars will at least realise that their deprivation is of direct assistance to the country in achieving a favourable 1516 balance of payments. I also hope, and I hope it will go out as the general expectation of this House that all dealers—not only most of them—will realise that they are in this respect for the present the trustees of the public interest.
§ Question put, and agreed to.
§ Adjourned accordingly at Eleven Minutes past Eleven o'Clock.