§ Mr. Gouldasked the Secretary of State for Trade and Industry if the Government will ensure that the parts of Japanese cars assembled in the United Kingdom are not invoiced at less than average cost, including all overhead and development costs; and whether the European Economic Community Commission has the right to question the relevant transfer prices after they have been approved by the competent United Kingdom authorities.
§ Mr. ButcherPrices are essentially a matter for the commercial parties to the transaction and are not subject to approval by the United Kingdom authorities or scrutiny by the EC Commission, except as generally provided for in circumstances established under domestic legislation or the Treaty.
In the case of the Nissan project, where such transactions will in some cases not be at arms-length between independent parties, parts will be transferred at prices which allow for an appropriate element of profit and overhead to both supplying and receiving companies.
§ Mr. Gouldasked the Secretary of State for Trade and Industry what is his estimate of the likely change in demand for steel produced in the United Kingdom as a result of setting up an assembly plant for Japanese cars.
§ Mr. ButcherIn phase 1 of the Nissan project, I should not expect a major change in demand for steel, since the major components, including body panels, gearboxes and engines, will be imported from Japan. In phase 2, (luring which planned output rises to 100,000 units, the demand for United Kingdom steel will depend on the mix of components locally sourced and the competitiveness of United Kindom suppliers. About one tonne of steel is used in the manufacture of a typical medium-sized saloon car.
§ Mr. Gouldasked the Secretary of State for Trade and Industry whether he expects a substantial proportion of any cars assembled in the United Kingdom by the Nissan Motor Co. to be exported to other countries; and whether he foresees any difficulties being placed in the way of such exports.
§ Mr. ButcherDuring phase 1 of the Nissan project, when the company will be assembling cars on the basis of imported kits, I do not expect the cars to be exported from the United Kingdom. The Government share Nissan's expectation that there would be substantial exports of cars in phase 2 of the project. I see no reason why difficulties should be put in the way of these exports; the cars will be undoubtedly European, with high levels of local content.
§ Mr. Gouldasked the Secretary of State for Trade and Industry what is his estimate of the completely knocked down value of Japanese cars on a cost, insurance arid freight basis without tyres, battery and so on, as a proportion of the ex-factory price of a comparable car in the United Kingdom if the whole profit on the operation is taken in the United Kingdom.
§ Mr. ButcherThe information on which to base such an estimate is not available.