Motor Industry (Hansard, 19 July 1989)

§ 6. Mr. Andrew Smith
To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the measures he is taking to assist the British motor car industry.

§ Mr. Newton
The Government's policies are designed to improve the competitiveness of business as a whole. The improved output and exports of the British motor industry are a clear sign of their success.

§ Mr. Smith
Does the Chancellor recall that at the time of the acquisition of Rover Group by British Aerospace, the EEC Commission was concerned to restrict overall car production capacity within the EEC? What discussions have there been with the EEC since then, and with what result? Can the right hon. Gentleman assure the House that Honda's output from Swindon will have access to all EEC markets and that it will be in addition to, not in substitution for, production at Cowley?

§ Mr. Newton
The hon. Gentleman knows that the issues at Cowley are separate from the announcement that was made last week about Honda development at Swindon. Our experience with the Commission on Nissan car exports to Europe is a sign of what we can expect on Honda or, for that matter, Toyota exports. The EEC car market has undoubtedly proved rather more buoyant than was expected at the time to which the hon. Gentleman refers, not least in Britain. The EC's current regime seeks not to restrict capacity but to prevent the payment of state aids except on a level playing field basis. The hon. Gentleman will know that in the case of Toyota and Honda no Government aid is being paid.

Mr. Beaumomt-Dark
Does my right hon. Friend accept that most hon. Members welcome the Government's measures, particularly in relation to Honda? Has he noticed that only 10 days ago the hon. Member for Oxford, East (Mr. Smith) was urging the Government to restrict the relentless use of cars? Better the sinner who repenteth, perhaps, but the hon. Gentleman repenteth because he thinks that it will help him with votes.

§ Mr. Newton
I had not noticed the earlier remarks of the hon. Member for Oxford, East (Mr. Smith), but I am sure that he will reflect on what my hon. Friend has said.

§ Mr. Cryer
The Minister will recall that when the statement was made about the Honda plant being installed it was said that his Department would help British component manufacturers to obtain a share of the component capacity in that factory. What means will he use to do that to help Hepworth and Grandage in Bradford, the foremost piston and gudgeon pin manufacturer in Britain, to obtain some of that capacity? If Honda manufactures its own engines it will erode the opportunities for British component manufacturers.

§ Mr. Newton
The most helpful thing that we can do is to continue what we have been doing—creating a climate that assists the development of efficient and competitive enterprise and the opportunities for it.

§ Mr. Oppenheim
When we take into account the misguided Government-sponsored mergers of the 1960s, the huge subsidies and trade protection in the form of a pernicious gentlemen's agreement which limited the choice of cars for consumers, has not the British car industry already had far too much help from Government? The best help that the Government can give is not to cosset or guide it, but to tell it to go out and make products that the public want to buy.

§ Mr. Newton
We have created such a climate and that is why many people are coming here to make cars, thus strengthening our economy.