§ 2. Mr. Nabarroasked the President of the Board of Trade whether he is aware that West German motor-car production has risen during the last five 1394 years by 157 per cent., French production by 143 per cent., and British production by only 51 per cent., and that West German car exports for 1959 were 720,000 as against 550,000 exported by Great Britain; and what study he is now conducting to relate these figures to the rates of domestic taxation in Great Britain, having regard to the 50 per cent. rate of Purchase Tax imposed upon British cars being twice or more that imposed on French and German cars.
§ Mr. ErrollYes, Sir. Developments in the export of cars both from this country and from our competitors are, together with other matters concerning the motor industry, the subject of regular consideration with the industry at the National Advisory Council for the Motor Manufacturing Industry. The effect of taxation of motor vehicles on the competitiveness of the British industry cannot be isolated from other factors.
§ Mr. NabarroYes, but is it not a fact that taxation is a predominantly important factor? Has my right hon. Friend observed that the incidence of domestic taxation, or equivalent of Purchase Tax, on the retail price of a motor car in this country is 42 per cent. compared with only 20 per cent. in France and only 12 per cent. in Western Germany? Is that not highly damaging to the prospects of this important industry in Britain?
§ Mr. ErrollNo, Sir, I cannot accept the arguments of my hon. Friend. Purchase Tax is only one factor of many affecting competition.
§ Mr. NabarroA most important one.
§ Mr. JayBut did not German motor vehicle exports also increase last year? Did they have the benefit of the Nabarro plan?
§ Mr. ErrollNo, they were spared the benefit of the Nabarro plan.
§ Mr. NabarroI am not a member of the Bundestag.