Motor Cars (Imports) (Hansard, 9 February 1976)

§ 16. Mr. Marten
asked the Secretary of State for Trade if he will make a statement on the level of imports of cars from the EEC.

§ Mr. Shore
In 1975, 278,000 cars were imported from the EEC, at a value of £337 million.

§ Mr. Marten
Will the Secretary of State explain why United Kingdom motor car exports to the EEC have so seriously declined since 1975, whereas motor car imports have increased? Was not a much advertised advantage of our entry into the EEC the wider markets announced by Lord Stokes? Has there not been a reverse effect?

§ Mr. Shore
I no more accepted the optimism of those forecasts than did the hon. Gentleman. I am not surprised that the situation in regard to the exchange of motor car exports between Britain and the EEC has turned out to be unfavourable to us. It is difficult to explain why the trends have been so bad. I believe that the answer goes back further than the hon. Gentleman suspects. In 1971 we imported 138,000 cars from the European Community; in 1975 the figure was 337,000. In 1971 we exported 217,000 cars, and last year the figure of exports was 121,000. The situation is not good enough. We must do better.

§ 25. Mr. Newens
asked the Secretary of State for Trade if he will now reconsider his decision not to introduce import controls to limit any further increase in the share of the British market taken by cars manufactured overseas.

§ Mr. Shore
My right hon Friend the Chancellor of the Exchequer made the position clear on 17th December. My view is that the present level of import penetration is too high, but I am confident that it can be reduced by the efforts of our own industry.

§ Mr. Newens
Does my right hon. Friend agree that there are dangers that the share of the market may go higher still, and that if this happens it will pose a serious threat to our car industry and to the jobs of all the workers who depend upon it? Is my right hon. Friend satisfied that our car exporters face reasonable terms when they export to competitor countries—in particular, Japan? Does he realise that many of us feel that the terms are very unfair?

§ Mr. Shore
I certainly think that there are dangers to our car industry. Indeed, the present level of import penetration gives some indication of the extent of this danger. Nevertheless, we are virtually in balance on exports and imports of completed cars and, as my hon. Friend will know, in the motor trade generally, taking account of commercial vehicles and components, we are still in a substantial surplus position.
We shall watch very carefully the practices of other countries, and we have had exchanges with the Japanese about liberalising some of their car testing procedures.

§ Mr. Ridley
Will the right hon. Gentleman confirm that we are not making enough cars to fulfil further export orders, and that the first essential for improving the balance of trade in cars is to make them instead of having strikes all the time?
Does the right hon. Gentleman agree that the import figures are very salutary, since they provide an indication of both quantitative and qualitative competition for our own car manufacturers?

§ Mr. Shore
I agree only to the extent that production clearly is—and has been in the last two years—a crucial factor in 22 the export effort of the British car industry. Opposition Members should not ignore the causes of disputes and the general malaise in the car industry. It would be entirely wrong to try to pin the blame on the workers in the industry itself.
The hon. Gentleman should also be very much aware that certain models—particularly small cars—are not being produced in the quantity that we need at the present time.

§ Mr. Raphael Tuck
My right hon. Friend has often said that great care should be exercised concerning selective import controls, because of possible retaliation. Does this apply to Japan, which is flooding our country with cheap cars and other goods, and at the same time severely restricting her imports from the United Kingdom?

§ Mr. Shore
I am watching the Japanese situation very carefully. When I went to Tokyo I had many exchanges with Mr. Komoto, the Japanese Trade Minister, on this question.
As my hon. Friend will know, we shall have at least reasonable stability for the next three months, following the talks that took place between the SMMT and the Japanese car manufacturers in London in December. I certainly accept that this is a problem that must be watched very closely, and I undertake to do so.

§ Mr. Michael Morris
When will the Government recognise that it is because of their dithering over the dumping of shoes, textiles, and so on, that hon. Members are intervening and that unless there is action on dumping every Member will wish to speak on the question of fair competition?

§ Mr. Shore
The hon. Gentleman really is deluding himself. The one area in which we can act—and in which I shall act—is against dumping of goods. I shall act with the full support of the House and in the full knowledge that I am acting within international economic law. There will be no reluctance whatever on the part of my Department to act against dumped goods, but it would be unrealistic not to understand that what we face, in the main, are not so much 23 dumped goods as goods of high quality produced at low cost.

§ Mr. Jay
Will my right hon. Friend explain why the Opposition support all sorts of duties, levies and restrictions on imports of food, which we need, but not on imports of motor cars, which we do not need?

§ Mr. Shore
I agree with my right hon. Friend that that is one of the extraordinary illogicalities and inconsistencies of Opposition Members.