HC Deb 01 July 1974 vol 876 cc4-6
3. Mr. Madel

asked the Secretary of State for Industry if he will estimate the level of motor car production for the remainder of 1974.

10. Mr. Hal Miller

asked the Secretary of State for Industry what forecast he has of demand for new cars in 1974 and 1975: and what is his estimate of the implications of that forecast for profitability and future investment in the motor industry.

The Under-Secretary of State for Industry (Mr. Michael Meacher)

Demand for motor cars is sensitive to a number of home and overseas influences and the forecasts are not sufficiently precise to justify publication. Changes in demand are only one of a number of factors influencing production, profitability and investment.

Mr. Madel

Does the Minister agree that unless there is a much higher level of activity in the motor industry employment in that industry will be at risk? In view of the need to develop engines which use less fuel, which is expensive in development costs, will the hon. Gentleman urge upon the Chancellor of the Exchequer the need to reduce the present level of taxes on the motor industry if we are to guarantee full employment in it?

Mr. Meacher

The level of activity is very important, but it is a matter for the industry itself, of which it should be expected, according to the level of demand, to be able to take account. We are prepared to consider any assistance requested under the Industry Act, but any relaxation in hire-purchase charges or credit controls, or changes of tax, such as the hon. Gentleman requested, is a matter for my right hon. Friend the Chancellor of the Exchequer. I shall make sure that he is informed of what the hon. Gentleman has said.

Mr. Ronald Atkins

Is my hon. Friend aware that the motor car industry's production is suffering throughout the world—in Germany, Japan and elsewhere—and that that is not due everywhere to British taxation?

Mr. Meacher

My hon. Friend is entirely correct to say that a major problem for the car industry is the depressed state of the economies around the non-Communist world. The May 1974 registrations in Japan were down by 45 per cent. The European car market is expected to decline considerably next year. What was a significant disadvantage for the British motor car industry was the three-day working week. The loss of output of both motor cars and commercial vehicles in the first quarter of this year compared with the third quarter of 1973 was no less than 20 per cent.

Mr. Miller

May I help the Minister with the estimates of the motor car industry itself for production and demand? Its latest estimate, in June, of the demand in the home market—[HON. MEMBERS: "Question."] Is the Minister aware that the motor industry's latest estimate, in June this year, of demand in the home market shows a drop of 27 per cent. compared with last year, and that the estimate for production, although showing a drop of only 6 per cent. depends on the export market and also means that a large number of cars will be going into stock? In view of the cost of money at present, will the hon. Gentleman take steps to ensure an increase in demand in the domestic market for the motor industry?

Mr. Meacher

I am well aware of the facts to which the hon. Gentleman draws attention, but I draw his attention to the fact that the then DTI investment intentions inquiry undertaken at the end of last year indicated a 13 per cent. rise in manufacturing investment this year, but that as a result of the three-day working week it collapsed almost to zero, although I am glad to say that it has now significantly improved.

Mr. Heseltine

Will the hon. Gentleman tell the House why the figures to which he refers were collected after the end of the three-day working week?

Mr. Meacher

The figures to which I referred were collected before the three-day working week, immediatly after, and most recently, some time after it ended. They showed the pattern to which I referred.

Mr. Heseltine

Does the Minister realise that I have here the document on which he relies, which clearly states that the contributors were asked early in April and that the replies were received in April and May?

Mr. Meacher

I have already referred to those figures, but I have drawn attention to figures which come after those to which the hon. Gentleman has referred.