Car Industry

HC Deb 01 May 1991 vol 190 cc301-2

4. Mr. Mans

To ask the Secretary of State for Trade and Industry if he will make a statement on the inward investment in the United Kingdom car industry.

The Minister for Trade (Mr. Tim Sainsbury)

The Government warmly welcome inward investment in the car industry.

Mr. Mans

Does my hon. Friend agree that the presence of three Japanese car manufacturers in this country clearly shows the success of the Government's policy in encouraging foreign investment in Britain?

Mr. Sainsbury

My hon. Friend is absolutely right. The Japanese are perhaps the most shrewd international investors and the fact that they concentrate so much of their European investment in Britain shows that the Government's tax regime, for companies and individuals, and the framework of industrial relations law that we have created provide an excellent climate for industry, especially for manufacturing industry.

Mr. Hoyle

Despite the inward investment, does the Minister realise that demand for motor cars in this country is low? Indeed, 340 dealers went to the wall last year. Ford has announced 1,000 redundancies and matters will be made worse by the 2.5 per cent. increase in value added tax. Does the Minister agree that despite the increase in exports, if there is not a strong home demand for cars more redundancies. more short-time working and cuts in investment, training and research and development will follow? That will not augur well for the future of the British motor industry.

Mr. Sainsbury

I should have hoped that the hon. Gentleman would applaud—as I do—the great success of the industry in increasing its exports. The Nissan factory expects to export about 80 per cent. of its production in the current year and that is having a healthy effect on not only employment but the balance of payments.

Sir Hal Miller

Does the Minister accept that for inward investment in this country to be brought to a successful conclusion, it is essential that the industry's products are freely traded throughout the Community? Can he assure us that that is accepted by the Commission and by the member states?

Mr. Sainsbury

I agree entirely that it is essential that cars produced in the United Kingdom are freely traded throughout the European Community. I assure my hon. Friend that cars produced, for instance, in the Nissan factory to which I referred are as much European cars as are cars produced by a company owned by General Motors or by Ford in any part of Europe.