§ Mr. Jim CunninghamTo ask the Secretary of State for Trade and Industry if she will make a statement on the cost of purchasing vehicles in(a) the UK and (b) the rest of Europe; what recent measures have been introduced to reduce the cost of cars in the UK; and what plans she has to take further measures. [10114]
§ Miss Melanie Johnson[holding answer 30 October 2001]: Both the Competition Commission, in its April 2000 monopoly report, and the European Commission, in its six-monthly surveys of prices, report prices in the UK to be significantly higher than in comparable countries in Europe.
The Competition Commission blamed the high prices of cars in the UK on practices associated with the selective and exclusive distribution system used by manufacturers, and allowed under the EC block exemption on vehicle distribution.
The Government's view is that competition is the best safeguard of consumer interests and that the current block exemption is not satisfactory.
The block exemption is due to expire in September 2002 and the European Commission is expected to publish draft proposals for reform around the turn of the year.