HC Deb 26 January 1970 vol 794 cc979-83
7. Mr. Kenneth Baker

asked the Minister of Technology what forecast he has made of the production and the registration of new cars in 1970.

The Paymaster-General (Mr. Harold Lever)

There are many uncertainties, but we expect increases compared with last year.

Mr. Baker

Will nothing check the complacency of the Minister and of the Chancellor of the Exchequer about the state of the British car industry? Why cannot hire-purchase restrictions be raised this afternoon, and why do the interests of this great industry have to be subject to the whims of the electoral timetable of the Prime Minister?

Mr. Lever

The industry is not subjected to the whims of either the Chancellor or my right hon. Friend the Minister, nor am I able to guarantee that the emotional reaction of either will be satisfactory to the hon. Gentleman. He has asked for an estimate. We are satisfied that there should be some increase in the coming year.

Mr. Howie

Has my right hon. Friend noticed that during the last year, while the motor car industry has been complaining about the fall in the home market, it has not even been able to hold that part of the home market which was its own and that foreign car competitors have been able to make substantial inroads into the British market? What can my right hon. Friend do to help the car industry to fight off this foreign competition?

Mr. Lever

The home motor industry has to face international competition and it is disappointing that such inroads were made last year. This is a matter for the industry. I am sure that it is aware of the need to be competitive.

28. Sir G. Nabarro

asked the Minister of Technology whether he will now make a further statement concerning motor car production for home and export markets.

Mr. Benn

Total production of motor cars in the first 11 months—forty-eight weeks—of 1969 was 1,569,028. On a weekly average basis this was 62 per cent. lower than in the corresponding months of 1968—forty-seven weeks—a 14 per cent. fall in home market production being partly offset by a 3 per cent. rise in export production.

Sir G. Nabarro

Is the Minister aware that home production of motor cars is now at the lowest level since 1962 and that my right hon. Friend the Member for Barnet (Mr. Maudling), the then Chancellor, when confronted with this situation in 1962, dropped purchase tax dramatically, from 45 per cent. to 25 per cent., on 5th November, 1962? Would he not recommend the present Chancellor to take similar dramatic action to prevent widespread unemployment in my constituency and elsewhere among motor car workers?

Mr. Benn

On the latter point, there are more people working in the motor industry, and were in 1969, than in previous years and there less short time. The hon. Gentleman's recollection of history is a bit selective, because among other consequences of the policies pursued then we had a huge deficit in 1962.

Mr. Christopher Price

Is my right hon. Friend aware that this is a very serious situation? If he is not able to persuade his right hon. Friend the Chancellor to relax total hire-purchase restrictions for the moment, would be investigate the possibility of a relaxation of hire-purchase restrictions on second-hand cars, where the bulk of the log jam is in home sales?

Mr. Benn

We have looked at the secondhand car proposition and the representations made to us, about which statements have been made in the House. I would urge my hon. Friend and hon. Gentlemen opposite not to adopt an alarmist note here. We have been in very close contact with the industry and we understand each other's position. We will continue to watch this. I would not accept the recommendations made by either the hon. Gentleman or my hon. Friend as representing the right remedy.

Mr. Maudling

Will the right hon. Gentleman not underestimate the importance of this matter? Is he aware that while our production has been falling, in other competing countries home production has been rising and, more important still, investment as a result of high profitability has been going up much faster than in this country? Is he further aware that, because of this, our competitive position is being eroded, which is very serious?

Mr. Benn

The right hon. Gentleman was in at the very beginning of the problem we have had to deal with, namely correcting the very substantial deficit, which has involved a restriction on the home market. It is no good appearing at this stage as if he had not left us the legacy with which the Government have to deal.

Mrs. Renée Short

Is my right hon. Friend aware that there is growing concern among West Midlands car workers at the fact that imports of foreign cars are rising and that these are adding to the deficit difficulties we have to face? At a time when the home market is depressed, is he aware that they feel, rightly, that we should not be importing 10½ per cent. of our total? What does he intend to do about it?

Mr. Benn

There are two answers to my hon. Friend. One is that imported cm are operating against exactly the same background of domestic credit re- striction as home-produced cars. Secondly, the percentage of cars imported into the United Kingdom is still very much lower than say, in the case of Germany, which has a very flourishing car industry.

Sir K. Joseph

Will the right hon. Gentleman not accept that if his Government had acted more sensitively in 1964 and 1965 they would not have had to impose the savage stop in 1966, which has led to the present problem?

Mr. Benn

This is not an occasion to go over history, but if the right hon. Gentleman had had the courage to take the measures necessary in the summer of 1964 this would never have arisen.

Sir G. Nabarro

On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I will seek to raise this matter on the Adjournment at the earliest opportunity.

31. Mr. Christopher Price

asked the Minister of Technology when he will publish the National Economic Development Council's report on the motor manufacturing industry.

The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Ernest A. Davies)

Publication of this report is a matter for the National Economic Development Office. I understand that it will probably be published early in February.

Mr. C. Price

Is my hon. Friend aware that the report has been substantially leaked this morning already in The Times Business News? Is he further aware that many people are sick and tired of the motor industry being used as regulator for the economy as a whole; and that it simply will not be able to hold the export lead which it has secured over the last few months if it does not secure a larger share of the home market? Will he urge his right hon. Friend to do something about it?

Dr. Davies

In the second part of his supplementary question my hon. Friend seems to be going into substance which may well be covered in the report. I would therefore ask him to await an opportunity to study that report. As to his comment on the Press, I am sure that he and hon. Members will be glad to see whether or not that was an accurate newspaper report when they have an opportunity to study the report.

Mr. Dudley Smith

When will the Government learn that a flourishing export market can be sustained only by a sound home market?

Dr. Davies

Again, this is a matter which I think the hon. Member expects to find covered by the report. I would ask him to await the publication of the report so that he can study what it says on the subject.

Mr. Howie

Since Press comment on this report has been going on now for some weeks, leading to a fairly widespread expectation of relaxation of the restrictions on the home market, would it not be better for the Government to make these relaxations sooner rather than later?

Dr. Davies

Again, I think that my hon. Friend is anticipating what he hopes to find in the report. I think that if we are to discuss the report in the House we should wait until it has been made available to all hon. Members.

Mr. David Price

In view of the considerable speculation there is about the contents of the report—even if it is known—would the hon. Gentleman make representations to his superiors that the time has come for a statement by the Government?

Dr. Davies

I take note of what the hon. Gentleman says. I can only say that we expect this report to be published in the very near future.