HC Deb 22 November 1966 vol 736 cc1119-25
7. Mr. Hattersley

asked the Minister of Technology what is his latest estimate of the total production of motor vehicles in Great Britain during 1967; and how much of the total production he expects to be sold abroad.

8. Mr. Christopher Price

asked the Minister of Technology how many staff in his Department are concerned with the motor manufacturing industry.

9. Mr. Chapman

asked the Minister of Technology how many staff he has working on the present and future prospects of the motor industry and the impact of Government policy on it; what are their qualifications; and what forecasts are being prepared of this industry's output and exports in the years ahead.

Mr. Benn

Seventeen staff at Headquarters are engaged on problems concerned with the motor industry, eight full time and the rest for a substantial part of their time. Of the total of 17, nine joined the Department with relevant experience in the Board of Trade, and four others have qualifications in engineering or economics.

No firm forecasts of the industry's output and exports are possible, but on the basis of current policies I expect total output in 1967 would be slightly lower than in 1966; although exports particularly of commercial vehicles, parts and components, are expected to rise.

Mr. Hattersley

Will my right hon. Friend agree that exports of private cars will fall in 1967? Would he also agree that the correlation between domestic demand and export sales has been so precise that that reduction in exports is in no small part due to the squeeze which has fallen disproportionately on the motor car industry?

Mr. Benn

I do not agree that exports of cars will fall next year and, therefore, the second part of the question does not arise. In fact, the correlation between exports and home demand is not a fixed feature of motor car manufacture.

Mr. Price

Is my right hon. Friend satisfied that the staff he has mentioned has the right sort of experience as well as the qualifications to tackle the job? Is its job simply forecasting and preparing statistics in consultation with the motor firms, or the more positive job of trying to jerk particularly B.M.C. into an era of better labour relations and more sustained growth in output?

Mr. Benn

Labour relations is a matter not for me but for the Ministry of Labour, but that reminds me to tell my hon. Friend that, of course, a number of other Departments are concerned with the motor car industry and that other Departments of my own Ministry, for example, the N.E.L., are doing work which has some bearing on the motor car industry. But I am still not satisfied with the arrangements inside the Ministry, and I shall be taking steps to strengthen the staff.

Mr. Chapman

As this industry exports about £500 million or more worth of goods, is it not about time that we either had a "Little Neddy" for it, or something like a "Little Neddy" for each of the five main producers, so that we could start at last some purposive future planning of the industry?

Mr. Benn

I well appreciate what my hon. Friend is saying. In fact, N.A.C.M.M.I., which has been going for a very long time, has done much of the work which in other industries is done by "Little Neddies", but consideration is being given to the establishment of a "Little Neddy" and a Question to the First Secretary would be appropriate.

Mr. Biffen

Does not the right hon. Gentleman recognise that output this year is going much below last year's levels? He now says that output for next year will probably not be up to this year's level. Is not that an extraordinary commentary on a party which came to power on its supposed ability to provide for steady growth?

Mr. Benn

The hon. Gentleman knows very well that the Measures taken in July were designed to curtail home demand. What is interesting is that the motor car industry is likely to be able to produce the same number of cars next year with a reduced labour force, and that, of course, is what productivity is all about.

10. Mr. Chapman

asked the Minister of Technology what forecast he makes of the motor industry's output in the year ending August 1967; and how this compares with the preceding year.

Mr. Shore

In the year ending 31st July, 1966, the industry produced 1,718,172 cars and 451,969 commercial vehicles. The Ministry of Technology cannot forecast the industry's output for the current year to 31st July, 1967, since this will depend on many factors that cannot at present be foreseen, but we expect it to be lower than in the previous period.

Mr. Chapman

Is it not about time that we had some planning so that we could have a better idea of what output in the next twelve months will be? As this industry is almost an indicator of the whole economy, and as this figure could mean that B.M.C., for example, will be producing 70 per cent. or less of capacity for the next twelve months, is that a very good thing?

Mr. Shore

I would not like to estimate at what percentage of capacity B.M.C. or any other car manufacturer will be running during the coming year because so much depends on the capacity to raise exports. I do not accept that exports are a fixed proportion of total output. I believe that exports are something which lies very much within the powers of firms.

Mr. David Price

If the Parliamentary Secretary cannot forecast the output of the motor car industry for next year, how in the name of common sense do the Government attempt to forecast it to the end of 1970, as they do in the National Plan, in which the rate is given as 4.6 per cent.?

Mr. Shore

The hon. Gentleman is making precisely the same error in relation to the motor car industry which he made a few minutes ago in relation to the machine tool industry. It is the very essence of national planning that meaningful estimates can be made of what demand will be over a period of years, estimates which could not be hoped to be made over a few months or twelve months. That is the essence of the difference between us.

Sir G. Nabarro

In view of the Minister's statement that next year's exports will be better, how does the Parliamentary Secretary expect exports to go up when price competitiveness abroad depends absolutely on a healthy home market which is rapidly diminishing?

Mr. Shore

I do not accept that price competitiveness depends wholly on the degree of sales which can be made at home, or on a percentage of sales or volume of output at home. It depends on other factors which enter into productivity, including labour costs. In this respect, as the hon. Gentleman will be aware, the Government have made a positive contribution through S.E.T., the export rebate scheme and in other ways.

12. Mr. Hattersley

asked the Minister of Technology what information he has received about revised investment and expansion programmes within the motor manufacturing industry resulting from the reduction in domestic demand for motor vehicles.

Mr. Benn

The President of the Society of Motor Manufacturers and Traders, Sir Patrick Hennessy, indicated to my right hon. Friend the Chancellor of the Exchequer on 31st October last that the motor industry expected to reduce by 30 per cent. its planned expenditure on investment in the coming year. According to my information, this will probably take the form of reduced expenditure on replacement equipment, rather than curtailment of expansion plans.

Mr. Hattersley

Will my right hon. Friend confirm that the only manufacturing company which is not reducing its investment programme is the British Motor Corporation which is increasing investment in order to increase its production through more productivity? Will he therefore confirm that both reductions in investment in three-quarters of the industry and increase in investment in one small part of it will result in reductions of the labour force throughout the industry?

Mr. Benn

The figures given by Sir Patrick Hennessy were given in his capacity as President of the S.M.M.T. If my hon. Friend wants to put down a Question about particular firms, I will see whether it can be answered, but in practice the possibility of increasing exports holds for the industry now its great opportunity to utilise its capacity and stimulate its own investment.

Mr. David Price

Has the right hon. Gentleman considered the secondary effects of that 30 per cent. reduction of investment in the motor car industry, the effects on the secondary industries which supply the industry with both capital goods and components?

Mr. Benn

As the hon. Gentleman probably knows, exports of components are going ahead very rapidly now and for the October figure we had a 19 per cent. increase over that of last year.

22. Mr. Christopher Price

asked the Minister of Technology what steps his Department is taking to improve the managerial efficiency and export potential of the motor manufacturing industry.

Mr. Benn

The motor industry has already set itself these objectives and everything my Department is doing in this matter is designed to help it.

Mr. Price

Could I press my right hon. Friend further on the question of a "Little Neddy" for the motor industry? Is he aware that many of us believe that this job would be far better left to a body set up by the industry, like a "Little Neddy", rather than by a Government Department, such as the Ministry of Technology? Would he give us some sort of date when we can expect a "Little Neddy" for this industry?

Mr. Benn

The question of a "Little" E.D.C. is for the First Secretary. This is not a conflict between a "Little Neddy" and the Ministry of Technology. In so far as there is any difficulty here it is where a "Little Neddy" would fit into the N.A.C.M.M.I., which brings leaders on both sides of industry and other Government Departments together under my chairmanship.

Mr. Hattersley

Notwithstanding the earlier Answer given by my right hon. Friend, would he not agree, on reflection, that the export potential of the industry referred to in this Question would best be improved by—if the record of 1963–64–65 is anything to go on—stimulating home demand as well as exports?

Mr. Benn

My hon. Friend keeps returning to the idea that there is a fixed ratio between home demand and exports, and neither the evidence of this country's motor industry nor of other countries' motor industries confirms this. In the case of tractors and commercial vehicles, the ratio is quite different. Therefore my hon. Friend should not press this point beyond a certain degree.