HC Deb 28 March 1984 vol 57 cc275-6
5. Mr. Roger King

asked the Secretary of State for Trade and Industry whether he has received representations from the British motor component industry about the levels of United Kingdom content in British produced cars.

Mr. Norman Lamont

The Department remains in regular touch with representatives of the component industry. The level of domestic business provided by car manufacturers in the United Kingdom is one of a number of questions addressed in these exchanges from time to time.

Mr. King

Is my hon. Friend aware that at present in Japan 18 major United Kingdom component suppliers are selling on quality, price and delivery? Is it not high time that some of the so-called United Kingdom car manufacturers in this country — General Motors and Ford—made use of the same component suppliers?

Mr. Lamont

As my hon. Friend knows, we have discussed local content with the multinational companies operating in this country. We have also said in the House that we expect motor companies established in this country to maintain a broad balance in their activities—that is, to build vehicles and buy components in the United Kingdom at a level that is at least broadly equivalent to their United Kingdom sales. That is what we have publicly stated, and it is a matter that we shall continue to discuss with them.

Mr. Geoffrey Robinson

Does the Minister agree that successive Governments have not put over £1 billion into British Leyland to see it proceed with widescale sourcing of overseas components. Will he look, in particular, at Dunlop in my constituency—the last remaining United Kingdom British wheel manufacturer—which has been mercilessly screwed to the ground by British Leyland and is unable to take up an investment allowance from the Government to proceed with a major modernisation scheme that has been pending for two or three years?

Mr. Lamont

I have had many discussions with Dunlop and with the hon. Gentleman on this matter. Austin Rover is anxious to buy British wherever possible, and wherever it is economic, and to treat British suppliers on at least equal terms with those from overseas. However, Austin Rover has to be a competitive company. It is fighting for survival.

Mr. Pawsey

I appreciate the need to buy the best components at the best possible prices, but does my hon. Friend agree that a healthy components industry is a prerequisite to a healthy motor industry in Britain?

Mr. Lamont

I agree with my hon. Friend. That is why we are talking to the multinational companies about local content, and that is why, with Nissan, we have imposed such a stringent local content. We still have a healthy components industry, because we have a substantial surplus in trade in vehicle components.

Mr. Hal Miller

Does my hon. Friend agree that it is unreasonable to criticise Austin Rover or other parts of British Leyland which maintain an 85 per cent. United Kingdom content while having to compete with other manufacturers in this country which have a much lower utilisation and, at the same time import another half again of their sales? Would it not be more sensible to take the line that our components industry needs to be more competitive, and will he try to assist in that process?

Mr. Lamont

I entirely agree with my hon. Friend. I sometimes suspect that, simply because Austin Rover is a Government-owned company, there is a tendency to try to get the Government to intervene in these decisions, which should be commercial decisions.

Mr. Shore

The Minister referred to the anxieties expressed by the British components industry, particularly about the Nissan deal, and he pointed out that the local content agreement was negotiated, presumably. to alleviate those anxieties. What is the use of a local content agreement when local content is defined not as United Kingdom content, but as Common Market content? What help is that to British industry?

Mr. Lamont

I am not quite as pessimistic as the right hon. Gentleman about the merits of the United Kingdom components industry. With a 60 to 80 per cent. local content requirement — [Interruption.] — Yes, it is European, but I believe that British companies will get a large share of that, and I believe that as a result the United Kingdom content of Nissan cars will be far higher than that of some other assemblers in this country.