HC Deb 03 July 1985 vol 82 cc317-9
4. Mr. Yeo

asked the Secretary of State for Trade and Industry what information he has as to the number of motor vehicles of Spanish origin which were sold in Britain in 1984.

Mr. Tebbit

According to statistics produced by the industry, 95,348 Spanish-built cars, 4,759 light vans and 193 lorries were registered in the United Kingdom in 1984.

Mr. Yeo

Is my right hon. Friend aware that there is great concern among those connected with the British motor car industry about the apparent ease with which Spanish producers sell their products here and the not so ready access that British manufacturers enjoy to the Spanish market?

Mr. Tebbit

We are very much aware of that. As my hon. Friend knows, this problem arose because of the agreement signed between the Community and Spain back in 1970 before we joined the European Community. We are dealing with it under the terms of the accession of Spain to the Community, and there are three principal measures which will be helpful.

First, all the Spanish import duties against our cars will be phased out over a period of seven years, and one half of that cut will be in the first three years.

Secondly, Spain will impose VAT on 1 January 1986, which will lessen discrimination against imports.

Thirdly, there will be a reduced duty quota, and in 1986 that will double the present level of cars imported into Spain.

Mr. Yeo

Too long.

Mr. Tebbit

Yes, probably so, but that was the best arrangement that we could negotiate. In the circumstances, I think that it is a reasonable one.

Mr. Park

In view of the imbalance of trade between Spain and Great Britain in motor vehicles and the fact that there is now apparently to be another phasing-in period, despite the fact that the Spanish motor industry is now bigger than our own, why should we agree to this further phasing-in period, and why cannot we adopt the attitude of other countries to imports?

Mr. Tebbit

The hon. Gentleman is a bit late in putting his point. After all, it was the Labour Government who renegotiated the terms of our membership of the European Community. If he thinks that it was possible to gain better terms for Britain, he should have made his point then. However, the opportunity did not arise again until the accession of Spain to the Community. The agreement which we have now negotiated is making the best of the bad job that we have had since 1970 in Spain's relations with the European Community.

Mr. Roger King

Given the present problems of selling cars to Spain or to any other European country, does my right hon. Friend consider that the recent agreement in Europe on exhaust emissions will benefit us in selling cars to Spain or anywhere else?

Mr. Tebbit

That agreement was not designed to benefit the motor industry. It was designed to benefit the environment. However, I think that the Germans might have thought of the possibility of imposing a speed limit on their autobahns first if they were really serious about guarding their environment.

Although it is likely that our reserve will be raised, I should make it clear that the agreement reached last week by the Environment Council is difficult for the United Kingdom to accept, and it will need the satisfactory resolution of a number of important outstanding technical points.

Mr. John Smith

The Secretary of State acknowledges that it is a very difficult agreement for the United Kingdom, and I understand—

Mr. Speaker

Order. I should not really have allowed the supplementary question posed by the hon. Member for Birmingham, Northfield (Mr. King). It is rather wide of motor vehicles of Spanish origin.

Mr. Smith

I was seeking to ask the Secretary of State a question arising directly out of his answer—

Mr. Speaker

Order. Since I allowed the supplementary question, I think that is fair enough.

Mr. Smith

I am obliged to you, Mr. Speaker.

The Secretary of State said that the agreement raised difficulties for the United Kingdom. He added that a reserve would be put on it, but that it was likely to be lifted. If these difficulties persist, why is it proposed to lift the reserve? Why not keep it on?

Mr. Tebbit

We face a difficult decision. We must decide whether no agreement is better than the agreement reached ad referendum. The right hon. and learned Gentleman will understand that that is a difficult decision. On balance, it would appear that to accept the agreement would hurt the motor vehicle industry less, not only in Britain but in the Community as a whole, than to reject it. I hope that we shall get a satisfactory resolution of those important outstanding technical points.