Motor Industry (Hansard, 27 November 1991)

§ 8. Mr. Martyn Jones
To ask the Secretary of State for Trade and Industry when he next expects to meet representatives of the Society of Motor Manufacturers and Traders to discuss the effects of the recession on the motor industry.

§ Mr. Leigh
My right hon. Friend met representatives of the Society of Motor Manufacturers and Traders on 11 November to discuss various motor industry issues. While no further meeting is planned for the immediate future, the Department maintains regular contact with the SMMT at all levels.

§ Mr. Jones
Is the Minister aware that car sales have fallen every month for the past two years and that, as a consequence, domestic production fell by 27 per cent. last month alone? Will he offer any hope for the future of the industry and its employees when he next meets the SMMT?

§ Mr. Leigh
What the hon. Gentleman fails to mention is that the industry has shown enormous flexibility in increasing exports by a massive 78 per cent. in the first nine months of this year. Contrary to what he said, that has enabled the industry to maintain production at much the same levels as those of 1990.

§ Mr. Roger King
My hon. Friend has just referred to the car industry's exports during the past few years, and especially this year, which reflect the quality of the product and the improvements in manufacturing technology. Does he agree that to stimulate demand within the United Kingdom home market, where problems exist on the retail side, the industry is entitled to expect some special attention from the Chancellor of the Exchequer at the next Budget, which could include a reduction in or the total elimination of the appalling 10 per cent. special car tax?

§ Mr. Leigh
I am sure that my right hon. Friend the Chancellor of the Exchequer will note with great interest my hon. Friend's comments. If he does not do so, I shall draw them to his attention.

§ Mr. Geoffrey Robinson
Is the Minister aware of the very serious position that faces the Jaguar car company in my constituency? Is he aware that the effect of the special car tax and of the vicious recession in the United Kingdom and the USA has led to the sacking of more than one third of Jaguar car workers this year? Does he realise that we need to deal urgently with the special car tax and to review the punitive arrangements affecting company cars that have so badly hit the Jaguar car company in my constituency?

§ Mr. Leigh
The luxury car companies are restructuring, especially Rolls-Royce and Jaguar. We wish them success in the future. The hon. Gentleman will know that I cannot comment on what he said about taxation. I shall ensure, however, that my right hon. Friend the Chancellor of the Exchequer is made aware of his comments.

§ Mr. Butcher
May I press my hon. Friend a little further on the question of the special car tax, given the Government's excellent record in getting rid of idiosyncratic taxes, of which this is one? Will my hon. Friend confirm that were he to make representations to the Chancellor of the Exchequer, there is no constitutional impediment to the Chancellor abolishing taxes before Budget day?

§ Mr. Leigh
I shall draw those remarks to the attention of my right hon. Friend the Chancellor.

§ Mr. Henderson
On a recent visit to Preston, the managing director of Leyland DAF told me that sales of trucks and buses—which I am sure the Minister agrees form an important part of the industry—in 1991 are at their lowest level since the 1930s. Does the hon. Gentleman have the grace to accept that that is clear evidence of the damage that has been done to our economy by a Government who have no industrial policy? Can he declare that the Government intend to produce an industrial policy? Furthermore, what support can he give to the motor industry?

§ Mr. Leigh
I am sure that the House would be interested to know what the Labour party's industrial policy is for the motor industry. British Leyland absorbed a massive £.2.9 billion in state subsidies while it was nationalised. What is the Labour party's policy? All we have, in the Opposition's current phrase of the month, is a kneejerk reaction. They have no policy for the future of the motor industry. We have created a flexible motor industry that increased its exports by 78 per cent. in the first nine months of this year. We have every reason to suppose that as soon as there is a reverse in the current downturn in demand, we shall be able to move to even greater success in the home market.