HC Deb 16 May 1990 vol 172 cc877-9
10. Mr. Boswell

To ask the Secretary of State for Trade and Industry whether he will list the numbers of cars produced in the United Kingdom over the last five years.

14. Mr. Squire

To ask the Secretary of State for Trade and Industry whether he will list the numbers of cars produced in the United Kingdom over the last five years.

The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Nicholas Ridley)

To the nearest thousand, 1,048,000 cars were produced in 1985; 1,019,000 in 1986; 1,143,000 in 1987; 1,227,000 in 1988 and 1,299,000 in 1989.

Mr. Boswell

I thank my right hon. Friend for that answer and recognise the improving trend that it shows. However, does he agree that the figures still show an overlarge deficit in that sector? With the new investment from both Japanese and home-grown companies, does he think that the figures will improve still further in the next five years, with consequential benefits both for the balance of trade and for British steel production?

Mr. Ridley

My hon. Friend is right. We have reversed the disastrous effects of Labour's policies in the late 1970s, when the production of cars fell from 1.5 million to fewer than 1 million per year. With present investments in prospect, the Society of Motor Manufacturers and Traders estimates that 2 million units will be produced per annum by the mid- 1990s. That will more than twice overtake the position that we inherited. It is a remarkable demonstration of the success of the Government's policies compared with those that the Opposition are still peddling.

Mr. Squire

Does my right hon. Friend agree that while those figures confirm that Opposition claims of a collapse of manufacturing industry are not borne out in the motor industry in any way, shape or form, it remains critical in such a multinational industry that wages and productivity remain competitive so that we can be attractive to investment, not just now but over the next decade?

Mr. Ridley

My hon. Friend is right—productivity is the key to competitive success and to improving wages. It may interest the House to know that Rover produced six cars per man-year in 1979, but in 1989 it produced 20 cars per man-year. That is the sort of level which, although still not adequate, shows the extreme necessity of higher productivity in British industry, and which has been achieved in that case. That is necessary if we are to regain market shares throughout the world.

Mr. Harry Ewing

Will the Secretary of State consider both aspects of the manufacture of new cars, the other aspect being the sale of new cars? Will he discuss with manufacturers the type of advertising material that places heavy emphasis on the very high top speeds that the cars can achieve in a short time? Is he aware of the number of recent tragic accidents in which youngsters have been killed trying to reach the high top speeds that manufacturers advertise for their vehicles?

Mr. Ridley

The hon. Gentleman may be interested to know that last year 991,000 cars built in British factories were sold to United Kingdom customers in the home market. That is the highest for any year since 1973. If customers want high acceleration, manufacturers must provide it. I remind the hon. Gentleman that the law of the land sets speed limits and they are enforced by the police. He is right to suggest that people should not break the law of the land and cause accidents. However, I am not responsible for the traffic laws, and it is necessary for manufacturers to produce what the customers want.

Mr. Win Griffiths

Does the Secretary of State intend to provide any evidence to the European Commission inquiry into why car prices in Britain are so much higher than in the European Community?

Mr. Ridley

As the hon. Gentleman knows, the matter has been referred to the Monopolies and Mergers Commission for an in-depth study. In view of my statutory position in relation to the MMC, it would be wrong of me to make any comment or to refer any evidence myself. The MMC's duty is to collect such evidence as it thinks necessary to pursue its inquiries.

Mr. Grylls

Does my right hon. Friend agree that the increase in the production of cars in Britain is very much attendant on their having free entry to the continental market? Although he has taken a robust line on the matter with his colleagues, can he tell us when the problem will be resolved and when cars from plants located in Britain will be allowed freely into countries such as France?

Mr. Ridley

I agree entirely with my hon. Friend's sentiments. At present, cars manufactured in Britain, by whatever company and whoever owns it, are allowed free circulation into the European Community. We intend to maintain that position and I believe that under the treaty of Rome it should be maintained. A new question has been raised by some member states in relation to the regime for the import of Japanese cars after 1992. I make it absolutely clear that the Government are adamant that there should be no change in the position of what are called transplants. They will continue to maintain free entry into the market, without there being any effects on any other matter.

Mr. Henderson

The Secretary of State will know that recent proposals from the Commission identify cars produced in Sunderland, potentially in Derby and also in Swindon, as cars which, during the transitional period, would be counted as part of the Japanese quota. I understand the strong words that the Secretary of State expressed this week to the Japanese Government. Can he tell the House how he intends to ensure that cars made in Sunderland, Derby and Swindon will be classified as British? Does he accept that if he is to get majority EC support for the proposal he will inevitably have to talk to the French, the Italians and the Spanish about extending the time limit on the transitional period?

Mr. Ridley

I did not use strong words on the issue to the Japanese, but I certainly did to the Commission, and to the Spaniards, the French and the Italians. They are the ones who received the strong words, to the effect that there will be no question but that these cars will have the free circulation to which they are entitled under the treaty of Rome. I believe that the matter will be resolved soon and entirely in our favour.