HL Deb 14 July 1967 vol 284 cc1353-4
LORD ERROLL OF HALE

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government what are their plans for assisting the expansion of the motor industry; and whether they will make a Statement.]

LORD BESWICK

My Lords, it is still too early to assess the effects of the recent relaxations in hire-purchase restrictions on motor cars, but figures available for new and used H.P. car sales in June show an encouraging improvement over the earlier months of this year. Possibilities of expansion will continue to be explored in the National Advisory Council for the Motor Manufacturing Industry and in the E.D.C. for the Motor Vehicle Industry, which has recently been set up.

LORD ERROLL OF HALE

My Lords, while thanking the noble Lord for that optimistic reply, do Her Majesty's Government realise that their view is not shared by the leaders of the motor industry, who are extremely pessimistic about immediate prospects, and that any reader of the newspapers will see that there are growing chances of short-time working in important sections of the industry? Could the Government give urgent consideration to reducing the purchase tax rates and also to a further improvement in the hire-purchase arrangements?

LORD BESWICK

My Lords, as the noble Lord will know from his past experience, at this time of the year there is often short-time working in the motor car industry. As for the difference of opinion between what I have said and the opinions of the newspapers, I feel that we should wait a little longer until the full effects of the recent relaxations are seen, before making any other plans or promises.

LORD ERROLL OF HALE

My Lords, in regard to the present relaxations, one important difference is that new car sales have not benefited from what should have been an upsurge in second-hand car sales. In other words, the normal pattern has not been followed in this case. Would the Government therefore look closely at the fact that the normal upsurge has not followed after the reduction of hire-purchase restrictions?

LORD BESWICK

My Lords, I do not think that the noble Lord is quite right there. The fact is that improvement is usually just apparent in the second-hand market, and I understand that that improvement has already taken place. So far as the new car market is concerned, the reduction in output last month was 5 per cent. as compared with output in June of the previous year, but that compares with a reduction of 30 per cent. over the previous five months of this year. So there is an upturn in the new car sales. I think it will not be until about the third week in August, when we get the full figures for July, that we can make a firm estimate of the results of the recent relaxation.