Motor Sport Industry

HL Deb 24 January 1996 vol 568 cc1082-109

6.7 p.m.

Lord Astor of Hever rose to call attention to the United Kingdom motor sport industry; and to move for Papers.

The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I am delighted that we have the opportunity to focus on the contributions of motor sport to the economy in this centenary year of the British motor industry. Surprisingly, this is the first time this British success story has been the subject of a full debate in either House of Parliament.

I declare an interest as President—honorary and unpaid—of the Motorsport Industry Association which promotes and protects the interests of the industry and which comprises many of Britain's most influential motor sport companies.

The motor sport industry is an example of what can be achieved when the Government provide the economic environment for it to flourish. We are now the world's acknowledged leader in motor sport innovation—a growth industry which last year generated more than £ 1.3 billion for Britain. Over £700 million of that was accounted for by foreign earnings. Fifty thousand people are now directly employed within British motor sport in small companies as well as major corporations. Three times that number enjoy part-time employment. Probably because no government aid or assistance is received in any form—unlike many other sports—these achievements remain largely unrecognised. Indeed, there are few official statistics or trends available—something the Government need to address as a matter of urgency.

Most of the Formula One teams, with their leading edge technology, are based in this country. Williams, Benetton, McLaren, Tyrrell, Jordan and Arrow bring in over £200 million of overseas sponsorship each year. Jackie Stewart's new team will join them next year and Ford have committed themselves to a multi-million pound investment over five years.

Since 1987, even that proud Italian institution, Ferrari has moved its design and development office here, tapping into the engineering talent in motor racing's established Silicon Valley to the south and west of London where there has been an explosion of independent research and development houses, providing specialist high level technology.

Many of the developments that go into a racing car, such as better engine electronics, field management and lightweight materials, are technologies that can be transferred to road cars to make them more efficient and environmentally friendly. The most American of all motor sport series, the Indy Car Championship, has been dominated by British expertise for years. Indeed, since the inception of the current championship in 1979, an American-built car has won only once—and even that car was designed here. Last year, all 33 cars on the grid in the Indy 500 were designed and built in the United Kingdom.

The most successful Formula One engine of all time is the Ford Cosworth. Between 1967 and 1985 it powered no less than 12 world champions and won 155 races, including the famous victory for James Hunt in the Hesketh Ford at the Dutch Grand Prix. An all-new Ford Cosworth engine powered Michael Schumacher to his first Drivers' World Championship in 1994 and will be in Jackie Stewart's car next year. This engine has also dominated the Indy Car series for 10 years. Cosworth is based in Northamptonshire, the same county as Ilmor, which also builds winning Chevrolet engines for Indy racing, as well as Mercedes-badged units for the McLaren Grand Prix team.

The tremendous growth of the British Touring Car Championship is an example of how promoters have recognised the needs of the public for a series that provides close racing in cars with which they can identify. The series is attracting record crowds and commands huge international TV viewership, and some of the world's most successful industrial corporations turn to Britain to run and build their competition cars. BMW is moving its motor sport division here from Munich. Its chairman said, The UK offers us the infrastructure, component suppliers, skills and more flexible overtime we need in order to be successful in touring car sport". Rallying is also increasing in popularity, and British technology and management is regarded as the best in the world. Over the past few years, most of the world's top rally teams have been run from the United Kingdom. However, the current restriction of rallying to private roads and tracks is significantly more limited in this country than elsewhere, and runs a risk of undermining the sport in the longer term. I should like to see this country fall in line with the rest of Europe by giving local authorities the powers, subject to due process, to close public roads for rallies, hill climbs and trials, and possibly even races. I hope my noble friend will give me some assurance on this point.

Complacency is the biggest threat to the industry. We face an ever-increasing challenge from overseas. A classic example is the British Formula Three Championship, which is now dominated by Italian-built cars, whereas three years ago it was 100 per cent. British.

What new policy developments can the Government consider to help the industry build on its current success and level of exports and encourage more inward investment? First, I very much hope that they will recognise motor sport as an industry in its own right. The absence of any British motor sport knighthood would seem to reinforce its lack of recognition. Furthermore, until that happens, British companies will be slow to come forward with sponsorship—the life-blood of the industry.

Secondly, the industry needs one contact point in the Government. That is essential, not only for motor sport companies, but also for the governing body, which needs someone to whom it can turn when political or diplomatic help is needed, particularly when it relates to European legislation. The president of the HA tells me that other countries, particularly France and Italy, are much better organised in this way. May I suggest that this is a role that my noble friend the Minister would he well qualified to fill? I am aware of his great interest in this subject since his days as a marshal in the 1960s.

Another issue that needs attention is the shortage of good engineers. It is a particular problem for component manufacturers. Those companies, mostly employing 50 or less, and many of them almost cottage industries, are one of the engines of future growth and employment for this country.

Unlike the position in Germany, France or Japan, engineering as a profession does not have the respect or status here that it deserves, and not enough students go into science engineering. One reason for that is that teachers do not have a good view of the industry. Schools need to visit factories and other suitable workplaces, so that children can be talked to directly.

Industry itself can help here. To promote the industry as a viable career option in this increasingly high-tech era, Toyota has set up an educational foundation, in which it has invested heavily in the past three years, to encourage children to take up engineering at school. The Government can also help by encouraging more companies to invest in future engineers in this way.

Furthermore, the education system does not prepare engineers to be ready for immediate use. In the case of the motor sport industry, they need to go through significant training before they are of any practical use in jobs such as the design of cars. Mechanical design should be more widely taught in engineering courses, as it ultimately affects the ability of manufacturers to design and develop components to a high standard. That must be addressed as it is a vital ingredient in attracting inward investment. I hope that Her Majesty's Government will promote the industry to universities, colleges and schools in order to attract high-calibre young people to the business and technical sector of this industry.

Finally, the massive traffic jams for the British Grand Prix at Silverstone, our flagship race venue, are a national disgrace. The Government recently approved a by-pass, as a private finance initiative, for Silverstone village, where the A.43 is permanently heavily congested and exceedingly dangerous. That by-pass needs to be started urgently, and I hope that my noble friend will take up the matter with the Highways Agency.

Great Britain is now the very centre of world motor sport. We are the enterprise centre for Europe. I congratulate Her Majesty's Government on providing the political environment for this industry to flourish. I very much hope that they can ride on its success and will continue to highlight, particularly to British sponsors, an industry that is a credit to this country. I beg to move for Papers.

6.18 p.m.

Viscount Simon

My Lords, I am delighted that the noble Lord, Lord Astor of Hever, has been lucky in the ballot and has introduced this debate. I have, since the mid-1950s, followed Formula One motor racing, and to a lesser extent rallying and saloon car racing. Before today's debate I sought advice from the Society of Motor Manufacturers and Traders and thank it for its assistance. I particularly thank Lotus Cars for its help. You would have thought that its many achievements since 1948 would have been highlighted in its letter to me—but not once did its name appear. I almost had to drag out of it the confirmation that it was a Lotus 49 which won the Dutch Grand Prix in 1967.

So what is noteworthy of that win? Both the car and the Ford Cosworth engine were brand new, and it was their first outing, having been completed only 10 days previously. I am not aware of that feat having been repeated. I asked Benetton for information, but it showed no interest. I understand that that is its usual course of action.

Motor sport is a complex industry which embraces a wide range of disciplines covering designing and building cars, marketing and funding, promotion, media activities and hospitality, with all the peripheral support these main areas require. It is a global business with an immense audience and considerable spending power and influence, to the extent that national leaders try to attract major events to their countries. Until I saw the television programme last week, I was not even aware that mainland China now hosts international sports car racing. This is an indication of its appeal.

The image of the sport attracts so-called glamour and personalities, which helps to sustain and feed the publicity. Worldwide audiences of Formula One are only exceeded by the Olympics and the soccer world cup, both of which are held only once every four years, not 16 times a year, every year, as with Formula One. A survey by the RAC showed that the annual turnover of motor racing in the UK is over £1 billion, of which more than 60 per cent. is from exports. There are about 50,000 people employed in the industry, as already mentioned by the noble Lord, Lord Astor.

The complexity and competitiveness attracts the very best in engineering talent and commercial professionals. It is widely acknowledged that British race-car designers, engineers and mechanics are the best in the world. Perhaps this is because we as a nation are good at innovation, tinkering and creative thinking. The evidence and confirmation is there. The top three motor sport arenas, Formula One, Indycar and World Rally championships, are dominated by teams and equipment sourced or based in the United Kingdom. While this island cannot be described as large, it is interesting to note that the majority of motor sport operations are based on an area covering about 100 miles by 150 miles.

A leading Formula One team will raise up to £50 million for one season, and this excludes the drivers' salary of, maybe £10 million, tyres, engines and travel. The contracted sponsors will not only supply this funding but, in addition, will spend an equivalent amount in promoting their involvement to their customers. As your Lordships are aware, the Ford Motor Company of the United States of America has recently announced a £100 million start-up package to part-fund a new Formula One team, to be overseen by the former world champion, Jackie Stewart, for three to five years.

So why invest such large sums of money? The answer is simple: motor sport has been developed as a highly colourful package since the 1960s, which attracts an audience and sells products. I recall seeing a Lotus 49 at Warwick Farm, a course well-known to the Minister, in red, white and gold livery during the Tasman series. I had not seen a car with advertising on it before. I thought that it looked very odd indeed.

However, we arc now used to seeing advertising and would think it equally odd if an Italian car appeared completely red, apart from its number; a French car, blue; or a British car in British racing green. Household names are also established through the power of motor sport. Noble Lords should just remember Fangio, Moss and Hawthorn, Jim Clarke, Stewart, Graham Hill and Jochen Rindt—who posthumously won a world championship—Mansell, Senna and Schumacher.

Motor racing developments can, and do, lead to improvements in our ordinary, family car. I am led to believe that other countries are exploiting the image of motor racing in their production cars: this country should also do so.

The motor sport industry owes a lot to the innovations of Lotus: including the first successful aluminium monocoque in Formula One; the first road-going composite monocoque; the Chapman strut; commercial sponsorship; ground effect; skirts; active suspension and active rear steer, to mention but a few. The industry as whole has improved our lives by developing better chassis, disc brakes, four-valve cylinder heads, turbo-charging, tyre design and, very importantly, crash protection.

So where do we go from here? The sport can be used to encourage development in other areas. With rule changes and the creation of new classes, may be we shall one day see electric vehicle racing. An endurance race for solar-powered vehicles already exists. There are many varied possibilities. Motor sport attracts and applies much of the same leading-edge technologies as the aerospace and military industries, but demands viability in breathtakingly short timescales. If a new technology is developed in Formula One, it takes years to appear elsewhere, yet it takes a maximum of three months for a top rival Formula One team to spot and apply a competitor's so-called "unfair advantage".

At the other end of the scale, karting, banger racing, and so on, can be enjoyed by those unable to afford more. Many community and rehabilitation programmes are built around such activities. This must be better than joy-riding. Motor sport is often used in schools and colleges as a basis for education, some formally arranged on a national format, but also individual activities set up by enthusiastic teachers.

Motor sport answers the basic questions, "How good am I? Am I better, faster, more clever, braver than?" and, "What happens if?" It does so in a stylised and attractive way which comprises a huge industry with a myriad of small players and very few large players. The UK is particularly successful in this form of competition.

6.27 p.m.

Lord Hesketh

My Lords, I am sure that all Members of your Lordships' House are extremely grateful to my noble friend Lord Astor of Hever for introducing this debate tonight. Before I say another word, I must declare an interest as a manufacturer and an entrant of grand prix cars in the early 1970s, as president of the British Racing Drivers' Club today and chairman of the board of Silverstone race track. I hope that I shall not touch on any of those three points in the brief words I have for your Lordships this evening.

It is very important to remember that many of the childhood legends which my generation and earlier generations were brought up on, although great, were not representative of the mass in the automotive industry. One can think back to the names of Napier, Bentley, ERA and the pre-war legends and reputations, but they did not represent the significant part of engineering, ability and creativity in the greater picture in Europe and had no part in the United States and the development which took place there. The significant countries from the birth of the motor car until the post-war era were France, Germany and Italy, in Europe; and in the United States, production engineering doubled and they created their racing industry.

If one looks back, there were many concepts before the war which were British, but they have not necessarily succeeded. When one comes to the post-war era, we look at two strains. The first is the great men who were committed and willing to put forward a lot of money towards making British racing successful. I pick out two individuals: Sir Alfred Owen, of Rubery Owen, and Tony Vandervell of Vanwall. At the same time there were innovative engineers.

The first man to lead that was John Cooper. He came from Bristol; he laid his first car ideas by using chalk on concrete with a couple of RSJs and put the tubing round it. He came to Silverstone in 1947, which was then an airfield controlled by the Ministry of Works. He was forbidden entry by a minor bureaucrat who held the padlock to the gate and so he asked a police officer for advice. He told him that he could not get him into Silverstone because it was not a race track but an airfield—a former RAF base—and sent him down to the Saracen's Head at Towcester. He took advice there. They said, "Maybe you should ask Lord Hesketh". He went up to my late father's house and my father appeared with two large dogs and said, "Drive your cars round my race track", which was a horse race track at that time. I think they tore up a bit of grass. But a year later they came hack to Silverstone. The Aitken family and the Daily Express have over the years put a huge amount of commitment into it and turned Silverstone into what is today, the premier race track in this country.

Out of a very small start came a great legend. It came from the commitment that was put in by Rubery Owen; by Vandervell; and then the engineers who came after Cooper—Colin Chapman, TyreII, the organisers and the creators. Out of a tiny beginning, where we are talking not even about hundreds of employees in 1946–47 but tens, came an industry which today has more than £1 billion of turnover, more than £700 million of exports, more than 40,000 employees and is a world leader. There is no question about that. There is no other country which compares. When, as I know, and most of those taking part in this debate know, not only Mercedes Benz but BMW and other major manufacturers, including Ferrari, are moving all their R&D into the United Kingdom, into a crescent which springs from Reading round to Huntingdon, around the west side of London, it is a fact.

There are many unsung heroes. The noble Viscount, Lord Simon, made a very good point. Not one knighthood has ever been given to a sport which in real terms has far exceeded the output of Liverpool Football Club or the English cricket team. I am sorry to say that, but it is true. It is a fact worth remembering and knowing today that the first and biggest television sport on earth is the Olympic Games. But those happen once every four years for two weeks. The second is the World Cup finals, which happen once every four years for two weeks. But the biggest on earth is Grand Prix racing, which happens 16 times a year, every year, year in and year out. That was created and is controlled by a British institution called the Formula One Constructors Association.

Many managers of Premiership football teams have little to write home about in their records, but they are better known than Bernie Ecclestone, who when I first ran a car 24 years ago when we were starting out in the creation of the Formula One Constructors Association had created something hugely significant for his country and the people who work in it and for the industry with which I had at one time the privilege to he associated. It is true that what has happened in 50 years is unique. If the rest of British industry had achieved what the racing car industry has achieved, this country would have the strongest and finest economy on earth even with a comparatively tiny population.

I should like to finish with a brief remark. The industry has never received any help from government; more importantly, it has never asked for any help from government; and even more importantly, it has never expected any help from government. But the one thing that could wreck it would be and could be help from government on two issues. The first is environmental. There is a kind of irredeemable logic about environmental legislation which one day could say, "No racing car can run unless it is quieter than a wren bird lying in the wing of a tree". That would ensure the destruction of an industry overnight.

The other is the Broadcasting Bill. Luckily, though Formula One car racing happens to be a bigger world-wide sport than any of the so-called great sports being discussed in the Broadcasting Bill, the fact that the industry is able wholly to use its ability to sell its quantity in the market and give that back to its industry which guarantees its success raises a question about those who say that there should be control on the ability of any sport to sell what it owns and what should be constrained. That I put up as a small marker. There is no requirement, and never has been, for this industry to be supported by government at any level. It requires only one thing—a commitment on all sides of your Lordships' House to promise that it will never be interfered with by government in order that it can proceed to create and proceed to the success that it will no doubt ensure for future generations.

I conclude on one note. There is great concern about the principle of advertising and what it can do to the youth of tomorrow. It is worth remembering that when there was only terrestrial television in this country there was in principle some way that one could control advertising. When I first went racing there was no advertising of alcohol on any car. That has in a way changed. There were not any rules. There were so-called guidelines but those slid away. If one looks at the Schumacher car this year, one will see quite a lot of German lager advertising on the side of it. But I am more concerned about tobacco advertising.

It is said that tobacco advertising should be banned. If you can control television, if you can control advertising, and if you are in favour of political correctness, I can understand that. But the truth is that today, with satellite and cable, there is no prospect of controlling the advertising on a universal basis of any product which a country deems to be acceptable. The one way to drive the industry not only out of this country but out of Europe is to follow the European Parliament in having a grand view about banning tobacco advertising. If you want to drive to the Pacific Rim a hugely successful industry, which on a comparative basis provides vast employment in this country, that is the way to do it. But it is quite impossible to support any sport which is 12 time-zones away from the factory to the track.

The reality is that technology has excluded the ability of any state to prevent advertising which it does not like, be it political in one sense or the product in another. The truth is that we must accept the world as it stands, capitalise on it and move forward with an industry which did not exist 50 years ago and today provides not only employment but the benchmark for creativity for very many clever young men and women in this country to succeed at home rather than have to go abroad.

6.37 p.m.

Lord Montagu of Beaulieu

My Lords, it is with considerable diffidence that I follow my noble friend Lord Hesketh, whose involvement in and knowledge of motor racing is second to none in this House. Nevertheless, today's debate is particularly timely, as only last week, with 1,500 other people, I attended the celebrations in Coventry for the 100th anniversary of the founding of Britain's first motor industry firm, the British Daimler Motor Company, and with it the birth of the United Kingdom motor industry.

Since the early days the motor industry was irretrievably tied up with motor sport, so it is particularly appropriate to debate the contribution of the British motor sport industry, as this country has since the earliest days competed in motor racing world-wide with ever increasing distinction and success. It is particularly poignant for me as my father was the first Briton to race a British car on the Continent, averaging 31 miles per hour and coming third in his Coventry built Daimler in the Paris to Ostend race of 1899.

The noble Lord, Lord Astor, mentioned that motor sport has not been debated in the House very often; in fact, very rarely. But I can tell the House that it was first debated in February 1903 and that led to the first official motor sport event in the United Kingdom. That was the Gordon Bennet race in Ireland which took place in 1903 as a result of a British Napier driven by S.F. Edge winning the 1902 Gordon Bennet race from Paris to Vienna, thus giving the United Kingdom the right to organise the next year's race. It will be no surprise to your Lordships that there was inevitably, naturally fierce opposition from local authorities in England, Scotland and Wales, supported by, may I say, no less a person than Edward VII. But enterprising persons in Ireland saw a chance of international fame and fortune and agreed to stage it. The necessary legislation to close the roads was introduced and guided through another place by my father and, exceptionally, all stages were passed in one day, as was done similarly in your Lordships' House.

So, all was set for Britain's first official motor sport event, which was in fact won by Germany with the British putting up a rather poor performance. Nevertheless, the Gordon Bennet race put Britain firmly on the road as a major player in the development of international motor sport. That resulted four years later in the opening of the Brooklands racetrack at Weybridge. Indeed, after a very slow start, in recent years, since the war, the industry has transformed itself, taking on the mantle of technological excellence from the aerospace industry and thus keeping Britain in the forefront of the international league in many advanced areas of technology.

As has been said, it is an important employer, with 55,000 full-time jobs and 100,000 part-time jobs. It has the most highly skilled and qualified workforce. That growth has taken place quietly and largely unrecognised. It has been funded by the industry itself, without calls for public finance. All that success relies on several factors and is certainly to be emulated.

The first factor is the excellence of our design and engineering skills. That is complemented by a unique, highly-skilled and flexible workforce together with world-beating expertise at the cutting edge of electronics and materials technology. Jointly, the efforts of our motor racing industry make a tremendous financial contribution to the country, as has been said. The recent decision by BMW to move its touring car operation to Britain, to be run in partnership with McLaren, underlines that success. It is significant that the great days at Le Mans of Bentley in the 1920s and Jaguar and Aston Martin in the 1950s and 1960s were mirrored only last year by the remarkable success of the McLaren roadcar, which, at its first attempt, won the race with five of the cars in the top six places.

As a result of technical advances applied and proved in motor racing, the family car has constantly been improved and made safer. A good example of that was the fitting of disc brakes on cars raced by Jaguar which arc now standard on almost all cars. I believe that it is very important that the Government should give the maximum encouragement to the most advanced companies in this field, whose objective now is to transfer that leading edge technology into the production car process, thereby playing a very significant role in the development of a new generation of family cars which are lighter, safer, more fuel efficient and less polluting, with consequent significant benefits to our economy and the environment.

Additionally, motor sport plays a remarkably strong ambassadorial role for our country. Unlike in other countries, it has never had any financial backing. I certainly agree with my noble friend Lord Hesketh on that subject and that that is how it should be. However, young driving teams cannot survive without substantial financial support. Even someone as famous as Jackie Stewart has difficulty in raising funds. So it is sad for this country to see the benefit of their successes gained in Grand Prix racing enjoyed by other nations and foreign companies. I hope that the Government will agree with me that it is important to promote and support investment not only in developing expertise and research but also in supporting young drivers. I was delighted to read two days ago that the Secretary of State for National Heritage had announced that, as a change in policy, some Lottery funds in future will be made available for the training and encouragement of budding new talent in the sporting area.

I hope that the budding new stars in motor sport can be included in the Lottery money. Even if motor sport is not an Olympic sport, it benefits the country significantly more than any Olympic successes. I have a suggestion to make in that respect. When they achieve success in international motor sport the rewards are very high, so could not some system of loans be set up, perhaps supervised by the Sports Council or the RAC, whereby loans could he paid off when and where appropriate in every case?

However, as the noble Lord, Lord Hesketh, said, there is a cloud on the horizon, which might indeed threaten the predominance of Britain in the world of motor sport. I refer to the European Parliament's suggestion of banning cigarette and alcohol advertising, which particularly threatens the sponsorship of sporting events, including motor sport. That could have a very serious effect on the sport in Europe, which would see more and more racing events transferred to the Far East, where increasingly new circuits are being built and the attitude to tobacco industry advertising and sponsorship is very different. With increased satellite broadcasting, the races will still be transmitted to Europe without any difficulties or consequences to the promoter's or the sponsor's marketing. But Britain and Europe will suffer very much. I hope that in any future discussions which involve the Government concerning the curtailment of sponsorship and advertising of tobacco and alcohol, that will he borne in mind. The consequences of such action on sport in general would he disastrous.

Another issue to be addressed is the need for great improvement of the facilities for spectators, especially at our major tracks, which attract a high proportion of overseas visitors and arc a valuable source of income. The governments of other countries, like France, build splendid new circuits and sports stadiums, thereby giving a boost to local economies. Perhaps similar thinking could be applied in this country by Lottery money going either to improving existing circuits or creating new ones. After all, the Sports Council considered a new rugby stadium for Cardiff. Why not have Lottery money for new grandstands at a British racing circuit?

In conclusion, there are many people who believe that the British motor sport industry does not gain the recognition that it deserves. I know one leading motor racing organisation which had great plans for major investment but is finding them very hard to implement owing to planning and other problems. That causes considerable frustration, not least because those people know that they would he welcomed with open arms on the Continent, where our competitors would dearly love to have the British expertise. As of now, the world of motor sport is beating a path to our door. Let us keep it that way.

6.47 p.m.

Lord Skidelsky

My Lords, I am grateful to my noble friend Lord Astor for giving us the opportunity to sing the praises of British motor sport. Motor sport is one of the unsung success stories of postwar Britain. I come to this debate as a historian and historians talk about the relative decline of Britain, but no decline has taken place in motor sport. Rather, it is the reverse; motor sport has boomed. We go on producing more than our share of champion drivers at the highest level. Cars designed, engineered and built in Britain won over 80 per cent. of the Formula One Grand Prix races held over the past 10 years. It produces £1 billion or more in foreign earnings, both in exports and inward investment. It is an undoubted success story.

With me, motor sport is an interest rather than an obsession. I speak with great diffidence in the presence of so many enthusiasts and experts. But the success of British motor sport has often led me to wonder about the nature of the British genius and the obstacles that we manage to put in the way of its full expression. In that sense, it is a metaphor for much of the history of postwar Britain.

Let us consider the contrast between our motor sport industry and our motor car industry. While our motor car industry was being virtually wiped out in the 1970s, small competition car manufacturing firms, such as March and Lola, which started up at that time, were becoming world leaders. They were triumphs of entrepreneurship, engineering, teamwork and marketing—all the things in which the ailing giants of the British motor car industry were so woefully deficient. Yet it was basically the same product that was being manufactured: a motor vehicle with four wheels, an internal combustion engine and a chassis.

One explanation for that contrast between brilliant performance on the one side and a fairly dismal performance on the other side is familiar. We have always been better at providing custom-built products for niche markets than at standardised volume production. American mass-production methods did not take as well here as in Germany or Japan—for interesting reasons: partly because they were seen as a threat to a much older British tradition, that of the skilled craftsman, and partly because the hierarchies of those industries reproduced our peculiar class structure without its saving grace of paternalism. Our strengths seem to lie in individual initiative or leadership, to use an old-fashioned word, allied to small-group organisation in which each person can leave his own distinctive and recognised mark on the product.

While British Leyland was crippled by strikes, small firms like March worked round the clock to meet their bulging orders. As noble Lords have pointed out, in the 1980s the Thames Valley became a "silicon valley" of high-tech, small and medium-sized sports car manufacturers while Coventry went bust. Those firms became outstandingly successful by using some of the most durable features of the British way of doing things—the gifted amateur, the scientific boffin, and pride in good quality work.

The good news—this is the main point of my intervention—is that that British tradition of micro-organisation is much better placed to meet the challenges of the new technology than it was to meet the challenges of Fordist mass production techniques. With the advent of distributed processing, faxes and micro-computers, business is being broken up and returned to a human scale. Economies of speed and flexibility have replaced economies of scale. As one study has noted, the new micro-technology had, brought the benefits of automation within the reach of specialists as well as mass producers". The emergence of a technology which fits our national habits and plays to our national strengths furnishes the most solid ground for believing that the long period of British relative economic decline has come to an end.

However, there still remains the considerable puzzle of why our undoubted centres of excellence and innovation have had so little impact on the long cavalcade of industrial mediocrity. Let us consider Japan where Mr. Karamoto, a racing car engineer in the 1960s, became president of Honda in the 1980s. In Britain we rarely get that transfer of ability and achievement from one sphere to another.

My noble friend Lord Hesketh mentioned Bernard Ecclestone, the head of the Formula One Constructors Association. I could mention Max Mosley, who started March in 1969 and is now the president of FIA, the Fédération Internationale de l'Automobile, to which the national motor clubs of 114 nations are affiliated. But those people, and many others of outstanding ability, are complete outsiders in the world of British motor car manufacture and distribution, and for that matter in the world of British sport, despite the fact that, as noble Lords have pointed out, motor sport attracts 100,000 competitors in this country, and mass television audiences.

There are many ways in which motor sport could contribute to wider commercial and social aims if it was given the chance to do so. Our brilliant sports car engineers have pioneered the development of low emission vehicles, which could guarantee our motor car industry a lucrative share of the American, and particularly the Californian, market. And why not get some of our top racing drivers like Nigel Mansell and Damon Hill involved in road safety education? We just do not think about such things.

I therefore welcome the announcement last week that the DTI will be looking at ways of building on the success of the British motor sport industry to enhance the competitiveness of the British motor car industry. As Mr. Lang, President of the Board of Trade, rightly put it: There may well be lessons which the volume market could learn from motor sport both in terms of innovation and export promotion. The Government can play a constructive role, both symbolically by honouring high achievement in motor sport, and practically by providing a point of contact for the fractured parts of the motor vehicle industry in order to facilitate the greater success of the whole.

6.55 p.m.

Lord Strathcarron

My Lords, I am grateful to my noble friend Lord Astor of Hever for initiating this debate on the motor sport industry. It is a specialised and small world about which little is widely known. It is also highly successful, but we arc not used to hearing or reading good news, mostly only bad news. For instance, few people know that the Ford diesel engines used all over Europe are built at Bridgend in South Wales or that the V6 engines built by Vauxhall at Ellesmere Port are fitted in Opel cars in Germany and Saab cars in Sweden.

In motoring sport, British technology and expertise in building racing cars have played a vital role. It all started in the late 1950s when John Cooper and Colin Chapman of Lotus built their very successful rear-engined Grand Prix cars. I should like to confirm the story told by my noble friend Lord Hesketh because I was among those who, with John Cooper, turned up to practise at Silverstone in 1947 when the custodian told us off and threatened to call the police because we were bound to run over his sheep. We went to my noble friend's father's house and he very kindly let us drive there. We did not tear up the racecourse, but drove discreetly up and down the drive and did no harm. Strangely enough, I later drove at the opening meeting at Silverstone in September 1948. At that time, the circuit did not go round and round but was diamond-shaped, using all the runways, but that is another story.

Turning back to those rear-engined cars, that configuration is now used on all Grand Prix cars. Britain soon became the technical home of Grand Prix racing, hacked up by knowledgable and enthusiastic sub-contractors. The teams are mostly based in southern England. Ferrari first established a technical studio under the direction of John Barnard, the well known British designer, as long ago as 1986. The McLaren and Tyrrell teams are near Woking; Ferrari is near Guildford; Williams at Didcot; Benetton at Enstone; Jordan at Silverstone and Arrows in Milton Keynes. So, it is not only Grand Prix cars but the top world rally championship contenders which are based in this country.

Britain's sporting expertise extends well beyond Formula One. For instance, the Bicester-based Reynard company, which built the chassis for the car which won the Indianapolis race, has an export turnover of about £15 million a year. Its rivals, Lola and Penske, are also based here. Lola is going to build the chassis for Formula 3000 cars this year and has been building Indianapolis cars for nearly 30 years. Last year its earnings were about £12 million.

Indy car and Formula One engines are supplied mainly by the two Northamptonshire-based companies of Cosworth and Ilmor Engineering, building engines for Ford and Mercedes Benz respectively. In the last financial year, the British motor racing industry earned profits of £750 million on foreign earnings of £1.3 billion. Your Lordships will agree that that is a remarkable achievement for Britain's exports. The industry employs about 50,000 people and well over 100,000 part-timers, which is very important.

The major Grand Prix teams operate with budgets of about £25 million to £30 million a year derived from multinational corporations. Most of that money finds its way to the UK to fund technical development, factory costs, and to pay the personnel.

I am a keen motorcyclist, and I must mention that in motorcycle racing the world superbike championship teams of Honda and Suzuki are based in this country. There are many small firms which play a significant part in supplying specialist parts for all aspects of motorcycle sport. Long may the motor sport industry continue to flourish to the benefit of Britain's exports.

7 p.m.

The Earl of Liverpool

My Lords, I should like to join with other noble Lords in thanking my noble friend Lord Astor of Hever for giving us this opportunity to focus on the United Kingdom motor sport industry today, and I congratulate him on his excellent opening speech. It was so comprehensive and full of interesting facts that I fear there may be few original facts left for me to impart.

I venture to speak in the debate principally as a member of the public who, over the years, has derived great pleasure from watching the sport, and reflected pride from our many successes. However, I can claim some small experience on the track since, like my noble friend and team captain Lord Strathcarron, I have had the honour of representing your Lordships in the annual Lords v. Commons race at Brands Hatch. As your Lordships may imagine, that is a competitively fought event, and I remember one year—I think it was 1993—when the race took place three days after my noble friend had undergone surgery. He arrived with both hands in bandages, having flown down from Scotland that morning, and proceeded to win the race outright. I can say just two things to my noble friend. First, "You're a tough act to follow"; and, secondly, "I hope that I shall have the pleasure of watching repeat performances in the future".

It seems to me that when the good Lord was distributing talent in the field of motor sport he displayed outstanding generosity towards this country, for, as has already been said by a number of noble Lords, we are the acknowledged world leaders in creative design, engineering and technology. We have dedicated and highly motivated race teams with entrepreneurial skills to match. We have marketing and advertising expertise, and, last but not least, a steady supply of world class drivers.

Over the years one can easily recall such evocative names as Moss; Clarke; Surtees; Stewart; Hill; Mansell; and Hunt, who I believe always credited my noble friend Lord Hesketh and his racing team with giving him the experience, determination, and inspiration to become a world champion. And the list continues today with such names as Damon Hill, Coulthard, and others. So the happy result of that pool of talent is a vibrant and successful industry. That is wonderful news for UK Plc, and it is achieved without one penny of government grant.

Although motor racing does not claim to be a "safe" sport, the industry's safety record has improved enormously over the years, and it now rates between 11 th and 15th in the Government's official league of dangerous sports, with horse riding, swimming, air sports, climbing, and even fishing coming higher up the league table. Indeed, it is in the field of safety that the industry will make such a significant contribution to car manufacture and design in the future.

Last year, Grand Prix motor racing's governing body, the FIA, campaigned successfully for new crash test standards which were accepted by the European Parliament. That will mean that all new mass production cars produced in Europe from October 1988 will have to pass the new off-set deformable front impact test, and the 300 millimetre barrier height side impact test. That does not mean a great deal to me but I can tell you that taking EU countries as a whole, it is estimated that those new standards will prevent up to 90,000 deaths and serious injuries each year.

In addition, the FIA safety working group is currently working with the European Parliament to lobby car manufacturers to provide mounting points as standard for the Isofix child seat. That system uses four claws which fit into special mounting bars along the front and rear edges of car seats and in an emergency enable the seat to be removed without disturbing the occupant. That is another classic example of where leading edge technology and knowledge gained in Formula 1 racing is delivering improved safety in road cars.

In the course of my research on this subject, I came across some interesting figures which I should like to share with your Lordships. The first was referred to by my noble friend Lord Hesketh. It relates to world-wide television audiences for Formula I races, but I do not believe my noble friend mentioned the average audience figures. I am told that they exceed 250 million viewers world-wide. The second interesting figure I came across is that cars designed in Britain have won over 80 per cent. of all Formula I grand prix in the past 10 years. The third statistic has already been mentioned by my noble friends Lord Astor and Lord Strathcarron. I hope that noble Lords will forgive me if I repeat it. The engine and chassis of practically every car competing on the famous Indianapolis 500 race tracks in the USA and elsewhere are designed and constructed in this country.

It seems to me that in the field of motor sport almost everyone is a winner: the public derive great enjoyment from it; it is a significant employer; the Government receive substantial tax revenues; and it provides companies with a highly efficient advertising forum. I agree entirely with those who have said that that should not be harmed in any way by the EU's attempt to ban alcohol and cigarette product advertising. Finally, the industry contributes towards improved road safety standards. So, I am happy to join with other noble Lords in wishing the industry continued success in this, its centenary year.

7.8 p.m.

Lord Lucas of Chilworth

My Lords, when my noble friend Lord Astor of Hever, introduced his Motion he reminded your Lordships that the motor industry is celebrating its centenary. I could not help reflecting, somewhat ruefully I must admit, that I have spent 54 years of my life involved in the motor industry. It struck me that I ought to know something about it, but when I am confronted by my noble friends Lord Montagu of Beaulieu, Lord Liverpool, Lord Hesketh, and others, I realise that I do not know very much about it at all, because they know the people and they know how it all started. But what I think I do know is that, love the car or loathe it—there are those two groups of people, although most I think fall somewhere in between—no one can deny the huge benefits that the motor car has brought to us, both economically and socially. The trouble is that as a result of the great success of the industry we are now saying, "This cannot go on". The loathers are becoming more predominant and the cry is, "Something must be done". Of course, that is the usual kind of cry. I am suggesting that within the context of my noble friend's Motion something is being done day on day, month on month, year on year.

My good friend Colin Dryden, who is a former motoring correspondent of the Daily Telegraph, wrote to me a few days ago and I wish to quote from his letter. He stated: We always used to say that 'racing improves the breed'. Early examples of advances in competition car design filtering down to the car driven by the mythical man … are". He gives as an example the humble screen washer which was developed as a result of rallying, not Formula One but motor cross and rally work. He instances the disc brake development by Jaguar for Le Mans. He goes on to state: These days the link is more tenuous but it's probably true to say that advances in aerodynamics enabling 220 mph plus down the Mulsanne Straight at Le Mans are applicable as well as fuel cut-off devices and crashworthy fuel tanks. All that demonstrates that motor sport is a mobile test bed, the benefits of which are translated into the ordinary car that we drive about each day.

I had intended to comment on the costs but that has been adequately covered by other noble Lords. In relation to costs I had intended to say something about sponsorship. It would be more helpful to your Lordships if I say merely that I agree with my noble friend Lord Hesketh as regards sponsorship. Whether one is talking about petrol, oil or tyre companies or food, drink and tobacco manufacturers, their support for the motor sport business is absolutely vital if we are to continue in the same way—indeed, if we are to maintain our supremacy in building motor sport vehicles.

We cannot turn the clock hack, but I believe that with a little political will we can look forward to even further benefits accruing from the motor industry over the next 100 years. My noble friend Lord Astor of Hever spoke about the need for training. My noble friend Lord Skidelsky reminded us of the initiative that the President of the Board of Trade is taking. I suggest to my noble friend the Minister that in terms of giving assistance to the motor sport industry and to the training of motor engineers we might consider copying the successful programme that existed in the DTI when I was there—in fact, I was responsible for it—called "Industry Year". That was an effort to bridge the gap between school, college and industry; the gap that existed when young men and women were considering which career to follow. We may be able to reintroduce something along those lines in order to encourage people into the motor industry, which is a most exciting industry. It has the benefits of being able to move into high-tech design and development, which takes one into motor sport. There can be few young men and women who arc not attracted to motor sport.

In the rather more mundane area of "something must be done" as regards pollution and the environment, while technical advances can make a large contribution we may well have to change people's attitude to car usage. We jump into our cars for almost any journey when perhaps our legs would do better. Such encouragement can come better from the Government departments involved in the environment and the trade rather than from any one particular manufacturer or trade association.

I am grateful to my noble friend Lord Astor of Hever for the opportunity to take part in this short debate. I hope that all that can be done will be done to maintain Britain's supremacy in motor sport and in the motor industry.

7.50 p.m.

Lord Addington

My Lords, in speaking in the debate I feel that I am treading on sacred ground for the simple reason that I am not the greatest enthusiast of motor sports. Indeed, perhaps I more often come into the loathing category.

As was said by the noble Lord, Lord Lucas, however, one cannot deny that the motor car has fundamentally changed our way of life. It is a vitally important part of the way in which society functions. I agree with the noble Lord's point about social attitudes towards cars. The motor industry is probably the most ultimate symbol of the love affair with the car. The car has become one's personal space and it allows personal freedom—or at least it appears to. The motor industry presents us with an object which travels at tremendous speed requiring the driver's tremendous skill and in strident competition. It is something to which people can relate. That vision was brilliantly encapsulated by the noble Lord, Lord Hesketh. I have heard the noble Lord speak many times but never with such a degree of passion.

I wish to make my only controversial point. I disagree with virtually everything that was said by all noble Lords about advertising. I should like to read a quotation which puts the issue of advertising in context. A spokesman for Rothman's said, No one hands over big cheques just to get a warm, fuzzy feeling". I am sure that the same attitude lies behind Marlboro when it hacks McLaren. The reason why tobacco companies and others are involved in motor sports is that it draws the huge audiences that noble Lords mentioned. One cannot help feeling that the vast numbers of people who watch the sporting events cannot imagine other advertisers coming to the fore. One might believe that they are replaceable. There may he problems in the transference of advertising but we live in a commercial world which is opening up the globe to commercial pressures. Surely the advertising of tobacco and spirits is replaceable. I suggest that we should all consider that because the status quo is what happens now and tomorrow is still up for grabs.

Much has been said about the economic benefits of the motor sports industry. The noble Lord, Lord Astor, said that 50,000 people are employed in the industry and there are possibly millions of secondary jobs down the line. We must treat the industry with great care and respect. It enables people to be involved in a sport and as an active sportsman who has studied the involvement of motor racing drivers I can say that in every way it is definitely a sport. It requires a physical skill to engage in competition with others—and I believe that we can probably use the following expression in its true context—on a level playing field. It is a competition between equals; or, indeed, as near as you can get to it. It is an equal application of resources. In motor racing, as is true in all other fields, where you have equal resources, equal expertise and money, you get the best results.

I am no great lover of motor racing, but I find myself watching and enjoying the sport when two cars are vying for the lead in a race. I must admit that my concentration span slips slightly when one car is permanently "x" number of seconds in front. It is very difficult for the cameramen to catch two cars running in first and second places in the same shot. In that situation my concentration may wane, but when there is competition my attention holds firm.

We are talking about a sport which deserves equal respect from the Government. It is also fortunate that it is one of the few sports which actually does not need—certainly in the present situation—government money. I am aware that another speaker may say, "Ah, but you will take away its main revenue", but I believe that we can say that the sport will look after itself. Broadly speaking, sport breaks down into two categories in all fields of activity. First, there is the pursuit of excellence about which we have been talking and, in particular, the highest levels of it; and, secondly, there is the participation aspect.

I return to the speech made by the noble Lord, Lord Hesketh. I agree with the noble Lord that motor sport is something where you must have, say, a fairly light touch when it comes to environmental issues. I suppose that "light" is probably the wrong word; but certainly very sensitive handling is needed in that respect for the simple reason that, in current technological terms, cars do make a considerable amount of noise when their engines are going at full throttle. However, I would say that it is unreasonable to try to restrict the major racetracks in this country on those few days when they are in operation. It is not a viable issue to try to do so.

A major concern of many people about sport relates to the proliferation of secondary events. There is one area in particular that I believe may well be worth mentioning. I refer to the use of four-wheeled vehicles for recreational purposes on some of our byways in the country. Our countryside is under great pressure of usage by many groups of people—for example, walkers, riders and so on. Moreover, now we have the increasing use of motor vehicles off road. To get a real buzz out of being in an off-road, four-wheeled drive vehicle, you need a very bumpy track. Ideally you need a nice pot-holed road after it has been subject to about two weeks of torrential rain. It is great fun to drive along with mud and water flying everywhere. Indeed, most of the people who are doing it are sitting in nice heated or air-conditioned cabs. They are sitting there in vehicles with bull bars, destroying the odd shrub at the side of the road.

Perhaps noble Lords can imagine what it is like for someone who is a walker or a rider on a horse using those roads after such activity has taken place. If such areas become popular tracks, they become virtually unusable. In 1981 we changed our classification about which types of roads could be used for such activities. We are now increasingly under pressure because any area which can be approached by a vehicle can be used for such off-road purposes. We must look most carefully at such activity. It is denying access to the countryside to other people who are not in cars. Surely the all-conquering combustion engine could be restricted in that respect.

Surely walkers, riders and other people should take precedence in this case. Why cannot we construct, say, proper test tracks for such activities which can be manipulated to give a new challenge and provide new tests of handling and skills? The growth of the industry and the growth in sales of four-wheeled vehicles surely dictates that, once again, there is a commercial market involved. As such people would probably not pay willingly to use any facility that may be constructed, I would suggest that, once they are prevented from destroying other people's walking territory, they might just come round and cough up.

I have a few final comments to make as regards what has been said about the science and technology base of the motor industry. It is undeniable that the motor industry has been for the normal road-use car what military aviation has been for civil aviation. Indeed, it has been where the testing has been; where the money has been; and where the incentive to carry out work has been. Moreover, as has already been mentioned, it is also a great incentive for our science and technology base. I do not know how we could really encompass engineering—and, indeed, physics, chemistry and all the natural sciences—and be more friendly to it, other than by encouraging postgraduate study in those fields. However, I hope that the Government will look kindly on the matter and try to encourage the industry to put money back into it. I know that that goes on and that certain advanced engineering firms sponsor people in such work. But I believe that it is something in which the Government could become active in helping.

With those thoughts, I conclude by saying that, whether one loves or hates it, the motor industry is here to stay. When it comes to the motor sports industry we have—certainly at the top end—something of which we can be proud as a nation.

7.25 p.m.

Lord Haskel

My Lords, in preparing for today's debate—and, indeed, while listening to it—I have learnt much to be proud of. I am most grateful to the noble Lord, Lord Astor, for introducing a cheerful topic to debate. I must also congratulate those noble Lords who have spoken who play an important part in the motor sport industry. I hesitate to call them big wheels, but I am sure that they know what I mean.

It is nice to know that not only do we have some of the most successful racing teams in this country, but also that many successful overseas industrial corporations come to Britain to build and run their competition cars. Indeed, we have heard about such famous names as Mercedes, Honda, Renault, Ford and BMW. We have also heard how virtually all the cars which take part in the Indy 500 races are built in Britain.

Racing car construction may not be the biggest business in Britain, but, from what we have heard, we are certainly the best in the world. I was much impressed with the enthusiasm of noble Lords opposite. Perhaps they should swap the Tory flaming torch logo for the chequered flag.

The noble Lords, Lord Hesketh and Lord Skidelsky suggested that we try to extract the lessons that might be learnt and which can be applied to other parts of British industry. Of course they are varied, complicated and are sometimes just due to luck and coincidence. Indeed, the noble Lord, Lord Montagu, spoke of the luck, or coincidence, regarding the fact that we had an advanced aircraft industry (perhaps because of the war), which meant that the sports car engineers could turn to it for engineering improvements. Frank Williams has described a Formula One car as, a low-flying aircraft with its wings upside down". The wings are designed to keep the car on the ground.

Perhaps I should explain that I come from the textile industry, and was aware of the connection between motor racing and aircraft engineering because, many years ago, my company supplied flame-retardant overalls to the racing teams. That was because we were licensed by the Air Registration Board to supply fabrics for aircraft interiors, and it was natural for the racing teams to seek suppliers to the aircraft industry for their own needs.

Many of those sub-contractors came from the aircraft industry to supply the Grand Prix teams. Fortunately the firms prospered enough to achieve a critical mass that carried the industry forward. That, in turn, made it harder for other countries to enter into what the noble Lord, Lord Skidelsky, described as a small "niche" business sector. I agree with him. So in England we have a cluster of innovative small businesses situated around the Thames Valley and run by enthusiasts.

The noble Viscount, Lord Simon, told us about the competitive firms working towards a common end, providing mutual support and encouragement, driven by the need for continuous improvement and engineering excellence, because in motor sport racing split seconds count. I do not know much about motor sport but while preparing for this debate there seemed to me to be something in this matter that was familiar to my own experience in the textile industry. It reminded me of the cluster of textile firms in Emilia-Romagna in Italy which co-operated and competed to produce innovative, high quality clothing which is one of the success stories of Italy. Indeed one of the best known firms providing a focus to this cluster was Benetton which is now a household name—as noble Lords know—in the motor racing industry. Benetton was one of the first retailers to exploit the quick response technology available from this cluster of businesses.

Some of the technology and management systems required for quick response were in fact pioneered by my company in the UK some 25 years ago. Surely this is another example of Michael Porter's thesis in his book The Competitive Advantage of Nations in which he argues that modern competitive manufacturing is best carried out, and is most efficient, in just these circumstances—small, innovative businesses focused on their core competences and responsible for their own performance, producing high quality, innovative products. I believe that the noble Lord, Lord Skidelsky, explained this, and I heartily agree with him.

During the 1980s we saw a decline in manufacturing industry in this country. In spite of this, corporate profits increased; but instead of investing these profits, most were paid out as dividends. In the motor racing sector these dividends were reinvested. Is not this the sort of desirable scenario we have been hearing about recently from the DTI in its papers on competitiveness? I see that the noble Lord, Lord Hesketh, does not agree with me at all, but it is true.

The RAC—and the noble Lord, Lord Astor—has called for a survey of the industry by the Department of 'Transport. I hope the survey will also look at these factors relating to investment and productivity because they encapsulate an essential difference between the Government and Labour on industrial policy—a laissez-faire, short-term, financial driven economy, compared with a high tech, high skill and high investment market economy.

Another area for learning valuable lessons is the way the racing teams handle sponsorship. The noble Lord, Lord Astor, and the noble Viscount, Lord Simon, spoke of this. It has been estimated that some £100 million a year is spent on Grand Prix sponsorship. The noble Lord, Lord Hesketh, told us that tobacco sponsorship is crucial to the business. Lotus cars were turned into Player's cigarette packets, and McLaren Cars became a flying Marlboro cigarette packet. Indeed the four main racing teams are all sponsored by cigarette manufacturers. Denied other forms of advertising, cigarette companies have turned to the glamour and sporting image of Grand Prix racing to sell their products. The result is that these advertisements are carried on the media, not least by the BBC. It is in fact a blatant infringement of its advertising ban and, frankly, I think it is a bit of a disgrace. The BBC may use weasel words to justify its going against the spirit and letter of its charter by saying that it is not carrying advertising but merely showing automobile races in which the advertisements are incidental. However, I think that it is about time the industry faced up to this problem and showed rather more social responsibility.

Like the noble Lord, Lord Addington, I, too, hope that sponsorship is opening out to new areas because the teams are good at getting sponsors. They understand a sponsor's needs and allow companies to use their sport for public relations. So sponsorship is perhaps becoming less about selling products and more about perceptions. It is interesting that after the Shell Oil company was hit by the Brent Spar fiasco, it tried to rebuild its image in Germany by sponsoring Michael Schumacher driving in Grand Prix racing for two years. Nevertheless Grand Prix racing has learnt how to squeeze every little bit of benefit from its activity. It seems to me that the only space that has not been sold is the space between the drivers' ears!

Many noble Lords have spoken of the spin-off from motor racing. The noble Earl, Lord Liverpool, told us of the contribution made to safety. The noble Lord, Lord Lucas of Chilworth, and other noble Lords told us how the ordinary motor car industry has benefited from better safety, better tyres and better suspension. The use of carbon fibre for lightness and strength has certainly been developed in motor sport. This expertise may well be used in other industries and it is no accident that Chris Boardman's carbon fibre frame cycle, on which he won an olympic medal, was made by Lotus.

The noble Lord, Lord Strathcarron, told us of the spin-off to the motor cycle industry. Like the noble Viscount, Lord Simon, I believe there is a need to speed up the transfer of technology to other sectors.

Many noble Lords have spoken of the role of government. One role of government in all this is certainly in the area of technology transfer as regards the use of carbon fibre; the use of ceramics in engines instead of metal, and fuel efficiency. There must be plenty of technology which can benefit other sectors of industry. The noble Lord, Lord Astor, spoke of the need to raise the status of engineers. I agree with him entirely. This is a problem inherent in other industries, too. In preparing for this debate I was interested to learn that Komatsu supplies engineers to the motor racing industry because having a chance to work on Grand Prix cars is so sought after by engineers that Komatsu reckons that attracts some of the best engineers to its company.

The Government can also encourage local colleges to become centres for knowledge, training and research. The sport is providing the winning drivers today. The noble Lord, Lord Montagu, spoke of the need to ensure—in order to hold on to that lead—that we invest in training the winners of tomorrow. Drawing on my textile experience, this was the role of the local government in Emilia-Romagna in supporting the cluster of textile firms. There the local government were also active in getting the mixture right and achieving a critical mass. Of course I can understand the Government being a little reluctant to learn from the administration in Emilia-Romagna because until last year it was a communist administration.

The noble Lord, Lord Hesketh, told us that in the past the industry has been sustained by enthusiasts investing their personal money. I understand it is an old saying in the motor sport industry that anyone can make a small fortune out of motor racing providing they start with a large one. Most of the firms are young and also sell to the aerospace and defence industries. Therefore it is important that all of these industries—racing, aerospace and defence—prosper. With the aerospace and defence industries cutting back, that is a matter of some concern.

Lord Hesketh

My Lords, during many years in your Lordships' House I have never, ever intervened in a wind-up speech. However, I have been so disgracefully misquoted by the noble Lord that I really must stop him. I never said that it was enthusiasts' investment that made the industry. All of these businesses depend on being run by businessmen. It is not some kind of cavalier adventure as the noble Lord would make out. The truth is that I have been misquoted constantly in his speech. He did not listen to a word I said. I have looked at his speech and seen that it was all typed out before he heard a word that I had to say. I should be grateful if he did not make any further mention of me because every time he does it is a wholly disgraceful, inaccurate misrepresentation. The noble Lord has no Whip with him which I think is also fairly disgraceful. It is becoming more and more clear that the Opposition spokesman has a lack of understanding which is frankly embarrassing.

Lord Haskel

My Lords, I am sorry that the noble Lord is upset. I carefully noted some of the comments that he made. Certainly I prepared my notes beforehand but I also noted down some of the comments that the noble Lord made.

I listened carefully to what everyone said. I noted that the noble Lord, Lord Skidelsky, told us of some of the fortunate sets of circumstances which have occurred over the past 40 years. He was speaking as an historian. With respect to the noble Lord, Lord Hesketh, one gets the impression, having listened to what other noble Lords have said, that these companies are driven by enthusiasm, passion and interest rather than by accountants. Many noble Lords have said that this set of circumstances seems to work well in this country, with responsive business units focusing on their core competences rather than working in large centrally-organised vertical production firms. Most importantly, I do not believe that those companies have as their first priority the production of shareholder value for financial institutions. Their first priority is simply to win races. That is what the sponsors want, and in many ways they are the providers of the capital. That is what the engineers, subcontractors and racing teams want. All of the stakeholders are united in a single objective. I would regard that as a very successful example of the stakeholder economy.

7.41 p.m.

Lord Chesham

My Lords, I very much welcome the opportunity for this debate. Like other noble Lords, I should like to thank my noble friend Lord Astor for initiating it. I have always taken a very keen personal interest in motor sports, and therefore it is a genuine pleasure to be able to discuss this exhilarating and commercially important sector of sport.

The motor sport sector is an area in which the United Kingdom leads the world. I can proudly make that statement without any reservation. Yet all too frequently it has been said that the achievements of the sector go unacknowledged. We should take every opportunity, such as this, to applaud and promote the sector. We have the most innovative designers; the best and most imaginative manufacturers; and I do not believe that we should be shy to say that we have some of the best drivers. The world comes to the United Kingdom for its racing cars. When we refer to motor sport we must recognise that we are talking not only of Formula One. Far from it. Undoubtedly Formula One is the pinnacle of the sector, which is only natural since it is such a high profile and glamorous sport.

A number of noble Lords have referred to viewing figures, etcetera. I have here some figures that are even larger than those that have been mentioned. Each season Formula One is televised to well over 100 countries and a staggering aggregate audience of 27 billion people. But we must not lose sight of the fact that the motor sport sector covers a much wider range and depth of activities. Rallying, Formula 3000, touring cars, research and development and manufacture of highly specialised components and electronics are just some of the areas in which we excel. Another area of motor sports that I highlight is the Isle of Man TT motorbike races. Surely there can be few who have not heard of this world famous event. The Isle of Man can rightly call itself the road racing capital of the world. Not only does it make an important contribution to motor sports but it also generates wider benefits. The races for both motorbikes and cars are held throughout the summer period and attract a significant number of tourists and race enthusiasts. This creates considerable economic benefits.

At the risk of sounding repetitive, I should like to repeat the incredible success story of the United Kingdom's complete domination of the Indianapolis 500 race series. Half a million people attend the event itself and another quarter of a million watch the pre-race practice runs. This serves as a superb advertisement for British craftsmanship and design ingenuity. That race is only one of a series. There is enormous coverage of the event in the United States in particular. Perhaps noble Lords will bear with me if I mention one more success story—there seem to be so many in motor sports. I congratulate Colin McRae who became our first world rally champion driver at the end of last year.

The sector is a very significant industry in its own right. My noble friend Lord Astor raised the question of statistics and the lack thereof. This is a matter about which the SMMT, DTI and representative bodies are concerned. The SMMT already has first-class information and statistics about the motor industry but not about the motor sport sector. I thank the noble Lord for drawing my attention to this matter. I will ask officials to see how the necessary statistics can be set up.

The noble Lord, Lord Haskel, will be interested to hear that there has already been an important transfer of technology from the specialist motor sport industry to the mainstream car production industry. Advanced braking systems, analysis of crash management, lightweight materials, engine and fuel injection development, electronic management systems and semi-automatic gear boxes are some of the areas that have directly benefited volume manufacturers. These developments have undoubtedly contributed to technical improvements in mass-produced cars, but, equally important, have improved the safety of driving for consumers.

In concluding this brief overview of motor sports, I should like to highlight some of the illustrious names that the sector has generated, some of which have already been mentioned tonight: Lotus, McLaren. Cosworth, Williams and Tyrell, to name a few. It is significant that although many people are not necessarily motor sports fans—including perhaps the noble Lord, Lord Addington—there is a high probability that they will have heard of at least one and perhaps all of those names.

Some of your Lordships have asked this evening what the Government are doing for the motor sports industry. I have also heard some noble Lords say that if they are not doing anything that is a damn good thing. We arc working with the sector actively in a number of ways. At last week's SMMT banquet for the centenary of the United Kingdom motor industry, the President of the Board of Trade, Mr. Ian Lang, announced an important new initiative to build on the success of the British motor sport industry. The purpose of the initiative will be two-fold. The first is to focus on ways in which companies in the volume automotive sector can adopt technology and other skills from the motor sport industry.

The companies in this country which design, develop, build and support racing cars are a supreme example of British engineering, flair and sophistication. They have many useful lessons for the wider component supply industry in terms of technology, organisation and teamwork. In all of these areas our component suppliers, with the support of the DTI, are working hard to improve their competitiveness. The second part of the initiative is to take a fresh look at ways in which the international prestige and world-class performance of British motor sport can support export promotion and outward investment initiatives.

We have a great asset in this industry, and the industry is in a position to attract public interest and attention across the world. More can be done to build on this. I am sure that noble Lords will agree that these moves arc to be welcomed. The DTI is actively developing methods to take forward this initiative. Moreover, DTI Ministers and officials will be intensifying their discussions with the Society of Motor Manufacturers and Traders, which is the lead trade organisation for the vehicle industry, and other representative bodies such as the Motor Sport Industry Association and the wider automotive industry to see how the interests of the sector can be further promoted. For example, the SMMT has offered to give the Motor Sport Industry Association affiliation status and appropriate administrative support. We believe that this generous gesture is to be applauded. It will provide the motor sport with a stronger voice and focal point. Of course, SMMT in partnership with DTI will continue to look at ways in which they can further promote the industry and enable it to prosper.

I should like to emphasise that the sound economic climate that has been created in the UK in the form of low inflation, low taxation and sound public finances has been central to allowing the motor industry in general, as well as the motor sport sector, to develop. In manufacturing we have world class vehicles and components manufacturers operating in the UK. We have a world renowned design engineering and R&D capability and our retail and distribution sector is increasingly innovative thanks both to manufacturers and dealers. It is no wonder that vehicle production is rising, that exports are rising, and that the UK has become the most attractive location in Europe for automotive companies.

One of the most exciting announcements that we have heard recently in motor sport was the news earlier this month by Jackie Stewart—surely one of the greatest names in the history of not only British but world motor racing—that, with the support of a multi-million pound long-term agreement with Ford he will form a new Grand Prix team. The team, almost inevitably, will be based in the UK—Milton Keynes to be precise—and will race for the first time in 1997.

These are exciting developments and serve to underline that the UK is regarded as the natural base for the motor sport industry. Indeed, Britain is arguably the enterprise centre of Europe with the automotive industry, and within that motor sport at the forefront of that sector.

Perhaps I may make a few comments on various points raised by noble Lords. A number of noble Lords mentioned tobacco advertising. A voluntary agreement was drawn up between the Department of National Heritage and tobacco companies last year. Some noble Lords may not be aware of it. A key feature of the agreement is that tobacco companies can now spend only 15 per cent. of their sponsorship budgets on promoting an event. That ensures that 85 per cent. of tobacco spending on sponsorship now goes directly to sports bodies. That agreement, of course, applies only in the UK. However, it is a voluntary agreement which has been entered into.

The noble Lord, Lord Addington, will be pleased to know that we are aware of growing concerns at the use of four-wheel drive vehicles on byways, in particular deliberate damage caused to countryside tracks. There is a commitment in the 1995 White Paper, Rural England: A Nation Committed to a Living Countryside, to consult on whether legislation to ban vehicles from byways may be desirable.

My noble friend Lord Astor and my noble friend Lord Lucas spoke about the shortage of engineers. It is a global problem, not just one faced by the UK. The DTI is aware that it is an important issue and is urgently investigating with the automotive industry ways of increasing the numbers of suitably qualified designers and engineers and addressing the industry's education and training needs.

I can give two examples. The cross-training initiative will pump prime the SMMT's design engineering group to undertake a feasibility study for design engineering initiative. The aim is to evaluate the scope for retraining people with non-automotive skills, such as those from the defence and aerospace industries, in automotive design and engineering.

Secondly, the DTI and SMMT are developing a concept known as the virtual university to meet more adequately the education and training needs of the automotive sector. It is an exciting proposal and one that the industry fully supports. The DTI, the SMMT and the industry are urgently exploring the options for this university.

I shall certainly take up the suggestion of the noble Lord, Lord Lucas, as regards the "Industry Year" to see whether vie can take it further.

My noble friend Lord Astor suggested that I might be a focal point for the industry. I am flattered and grateful to my noble friend for suggesting that I should be. In the absence of the noble and learned Lord, Loki Fraser, when that occurs, I would be happy to fulfil such a role as appropriate. However, Ministers in a number of government departments have a keen interest in the motor industry. In particular, Ministers and officials from the DTI have responsibility for sponsoring the UK vehicles manufacturing and motor sport industries. The DTI and in particular the department's automotive directorate already has an active and positive working relationship with the industry and always stands ready to advise and support on issues of concern to the industry.

My noble friend correctly pointed out that the Silverstone bypass is part of a private finance initiative. Indeed, the bypass is part of a larger project, the A6/A43 south Midlands network, which was announced by the Secretary of State last November. The project is entirely dependent on private finance. The Department of Transport does not envisage work starting on the project until some time in 1997.

My noble friend Lord Astor raised the issue of motor sport on roads. Although the Department of Transport has not objected to events such as the Birmingham Superprix for purpose-built racing cars, the department believes that motor sport on public roads conveys the wrong message to motorists and encourages dangerous imitative behaviour. That can be borne out to some extent by the number of deaths after the TT by people using those roads thinking that they are qualified TT riders.

My noble friend Lord Montagu raised a number of interesting matters. I should like to consider them to see whether we can do something about those interesting and helpful suggestions.

I wish the industry the very best for the future and emphasise that the Government stand ready to continue to help nurture the industry.

7.58 p.m.

Lord Astor of Hever

My Lords, this has been a fascinating debate. We have heard some very successful, distinguished, informed and uninformed speakers. I am delighted that on the whole most speakers reinforced what I said earlier.

I am grateful to all noble Lords who took part. I apologise that they will he leaving later than I promised because of the Statement. I thank the Minister for his reply. With his interest and enthusiasm I feel that I have achieved my objective of making the Government more aware of the motor sport industry.

I have two points. First, I strongly disagree with the noble Lords, Lord Addington and Lord Haskel, about the ease in obtaining sponsorship. That is completely untrue. I know that even some of the leading Formula One teams are struggling to obtain all their sponsorship. I hope that they will bear that in mind.

Secondly, as deputy president of RoSPA I shall certainly follow through the very good point made by my noble friend Lord Skidelsky on road safety. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.