HL Deb 26 March 1984 vol 450 cc3-4

2.42 p.m.

Earl Attlee

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

The Question was as follows: To ask Her Majesty's Government what steps they are intending to take to redress the difference between the import duty levied by Spain on British-made cars, and that levied by the United Kingdom on Spanish-made cars.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)

My Lords, the difference in duties on cars is embodied in the trade agreement between Spain and the Community which was concluded in 1970, before the United Kingdom had joined the Community and at a time when Spain was less industrialised than she is today. Although we recognise that, in charging high duties, Spain is acting within her treaty rights, the Government have made clear their view that, 14 years later, these arrangements are anomalous. For this reason, we welcomed Spain's decision last year to introduce reduced-duty quotas for imported cars. The only definitive solution is, however, for Spain to join the Community on terms which include significant early reductions in Spain's highest duties. We are working to this end.

Earl Attlee

My Lords. I thank the Minister for that Answer. Will he not agree that it is ironic that, of the volume car maufacturers in this country, there is only one which is British owned, and that is British Leyland; that Austin Rover is the only one which exports to Spain, and that neither Ford (UK) nor Vauxhall exports? Is the Minister aware that at the present time British Leyland is given a quota for a maximum of one year in advance, and that normally it is very much less? Would he agree that it would help BL immensely if they were given a quota for a three-year period?

Finally, did the noble Lord the Minister read an article in the Daily Mail recently by their motoring correspondent, Michael Kemp, in which he claimed that SEAT, which is a Spanish state-controlled company, intended to import 30,000 cars a year into this country? Is he aware that these imports of 30,000 cars would have no quotas and would bear only a 4.4 per cent. import duty?

Lord Belstead

My Lords, I am not sure that I would agree with the noble Earl that it is ironic that BL are getting a quota. 1 would say to the noble Earl, however, that BL, I am glad to say, are doing well out of their quota, because this country increased its exports to Spain by 75 per cent. last year as compared with the year before. Nonetheless, if I may take up the rest of the noble Earl's question, we agree that there is room for Spain to make improvements in next year's quotas, and we shall certainly be making Spain aware of our views. I did not read the newspaper article, but I think that the noble Earl has very usefully underlined the need for Spain to come into the Common Market, when the tariffs will be harmonised.

Lord Mottistone

My Lords, did my noble friend say that 1970 was when the agreement was made? Was there no opportunity in the Tokyo round of GATT negotiations to bring up to date the arrangements between ourselves and Spain?

Lord Belstead

My Lords, I do not know whether the attempt was made in the Tokyo round of GATT. My advice is that an attempt was made in 1979 to do something about the situation but it failed since the other member states of the Community were not prepared to make the concessions in the agricultural field which Spain demanded as the price for making concessions on industrial tariffs.

Lord Kilmarnock

My Lords, would the noble Lord agree that it will be impossible for Spain and Portugal to come into the Community unless they agree to an increase in own resources on the next round of negotiations?

Lord Belstead

My Lords, I think that is another question.

Lord Hawke

My Lords, would my noble friend not agree that in all these trade questions the critical factor is the exchange rate, and that we suffer from too high an exchange rate because we are a great financial centre and the bankers like a high exchange rate as against the manufacturers, who need a low one?

Lord Belstead

My Lords, we have a good exchange rate because we have a good Government.