Orders of the Day — Motor Industry

Part of the debate – in the House of Commons at 12:00 am on 6th December 1960.

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Photo of Mr Christopher Woodhouse Mr Christopher Woodhouse , Oxford 12:00 am, 6th December 1960

The depressing thing about this debate is that it seems to me virtually impossible to say anything entirely new about the motor industry, though the hon. Member for Coventry, North (Mr. Edelman) has certainly done his best. With a few exceptions, practically everything possible has been said already, and as practically all of it is true, it seems that practically nothing can be done about it.

I think it might still do some good, both to the industry and to the nation, if some of the truths that are uttered from the other side of the House found an echo on this side, and if some of the truths uttered from the Treasury Bench were recognised by the Opposition, who I feel sure would be saying very much the same thing if they were in power today.

Speaking for myself, and I do not believe that the motor industry generally would disagree, I would personally welcome the examination of the future prospects of the motor industry by a working party, although I feel somewhat uneasy about some of the implications which seem to lie behind that idea on the other side. I do not see how a working party of the kind that I could welcome would differ, either in composition or operation, from the bodies which already exist, and to which my right hon. Friend the President of the Board of Trade referred in his opening speech. I am certainly not going to urge the Government prematurely to take the action which we all know they are going to take sooner or later in relaxing the credit squeeze on the home market, because the Government must be, and alone can be, the judge of the right time to do that. But I feel that it is reasonable to suggest to the Government that in future they should be prepared to accept rather more responsibility for some of the consequences of the sort of action which they were obliged, for very good reasons, to take earlier this year.

Every hon. Member of this House who represents motor industry interests has seen these consequences. We have seen them in idle machines and in piled-up stocks, but most serious of all in short-time working and, sooner or later, in actual unemployment. The Government can, of course, and will and do point to other industries and other parts of the country, where people are crying out for more labour in order to fulfil important export contracts, and the implication is that the under-employed motor workers ought to go where they are wanted.

In a constituency like mine, dominated as it is very largely by a single industry and its ancillaries, I think that kind of argument might correspond to economic logic, but it does not correspond to human nature. A man who has recently established himself in Cowley, induced by the prospects in the motor industry, cannot just uproot himself and go work somewhere else, especially when he knows that if the industry picks up again, as we all hope and believe it will, in three or six months' time he will be wanted back again in Cowley. Nor will any alternative employer want to take on men on this sort of terms.

If, as we have been told this evening, in so vigorous, competitive and also volatile an industry as the motor industry, short-time working is from time to time inevitable from all sorts of automatic fluctuations—and I emphasise here that I am talking only about short-term setbacks of a few months' duration and not about a long-term recession, then in these circumstances it seems to me that it should not be impossible to devise some mutually agreed way of mitigating or insuring against the personal hardships which that brings about.

The motor industry may be bound to have its ups and downs—I do not doubt that it is—but surely there need not be such huge precipices between the peaks and troughs for the workers. It should not be impossible to find a way of ensuring that during these short-term setbacks—and I repeat that I am talking in terms of months—workers' wages should fluctuate less precipitously, between less extreme limits, not between £18 or £20 to £7 or £8, but from a rather lower maximum to a very much higher minimum.

Of course that would entail negotiations between employers and trade unions and it would not be easy—I do not imagine that it would—but the Government do not have the right to say that it is exclusively a matter for the employers and the unions to sort out on their own, because when the Government are themselves in part responsible—and I emphasise in part—by measures which the national interest makes necessary, then, just for that reason, they should accept responsibility for taking some initiative in bringing about a mitigation of the consequences. The trouble is that, although the Government are in part responsible, they are only in part responsible. Other factors are at work over which the Government have no control and which they cannot cure by the kind of measures to which the home market is susceptible.

What many of us fear, and it is a fear which has been expressed on both sides of the House, is that the roots of the industry's problem which lie overseas are deeper and more intractable than that. Everyone agrees that the future of the industry stands or falls on its success with exports. Everyone knows that we cannot compel foreigners to buy our motor cars and that the competition is getting severer all the time. Every exporter will say, as we have been told more than once tonight, that the surest condition of a strong export trade is, a strong and large home market behind it.

Yet the tragic paradox of our present economic situation is that when our exports are doing badly the first thing we have to do to rectify them is to punish the home market and, even then, we have found this time that our exports are not really doing any better even when we punish the home market.

Nor is it surprising that our export trade is no longer doing as well as we would like. Competition is severer. Countries to which we used to sell our motor cars are now manufacturing their own. Under-developed countries are certainly an important potential market, but they are mostly countries whose main potential lies fairly far off in the future. Probably, the only really important expanding market for our engineering industries at the moment is in Western Europe.

In our single-minded preoccupation ever since the war with the problem of exports, every successive Government has to some extent failed to take sufficient notice of the most important development in world trade which has happened since the war, which is that the biggest expansion has been not in the export trade but in domestic markets.

To take the biggest domestic market of all, the internal trade of the United States of America is now some three or four times as great as the whole international trade of the whole world put together. That is why the concern of the United States about exporting is no more than marginal, and the fact that the United States is at present facing a balance of payments crisis is irrelevant in this connection, because its balance of payments problem has nothing to do with an adverse balance of trade. Even our own trade in our own domestic market is at least three times as great as our foreign trade overseas, and it is from the United States that the inspiration of the European Economic Community has sprung.

In a very large domestic market, with no tariff barriers and no other internal economic obstructions, so the argument runs, one's economy is stronger, one's dependence on exports is less crucial, and, incidentally, one will probably get a more flourishing export trade into the bargain without having to worry so much about it. This argument should apply just as much to this country as to any country in Western Europe, and it points inexorably in the direction of our seeking to amalgamate our domestic market with the only other market in the world which would really suit us in present circumstances—the European Economic Community—so as to create for ourselves an internal domestic market of between 200 million and 300 million consumers instead of the mere 50 million which we now have.

I am well aware that this is an extremely controversial matter which has been canvassed many times before. I am well aware that someone will have a difficulty for every solution. I am aware of the objections from the point of view of agriculture and horticulture. I am aware of the objections from the point of view of social and welfare policy, from the point of view of Commonwealth relations and national sovereignty, and I am well aware of the fact that there is a good deal of reluctance in the European Economic Community to let us in. I am also aware that there are and must be innumerable practical difficulties of which no one who is not in Whitehall all day and every day can possibly be aware.

I will say only that I have never been convinced that all those difficulties are insuperable. I am not doctrinaire in these matters, and I have come to believe that in the long run such a merger of our markets is the only possible solution for our industries and that the longer it is postponed the harder it will be to bring about.

The only way to join a club is to start by declaring a wish to join it and not to go sniffing around the back trying to find a comfortable semi-detached annexe. If one joins early enough, one will have the opportunity of moulding its institutions and framing or reframing its rules, which have already been riddled with exceptions by existing members. But if one does not do so, or if one leaves it too late, I greatly fear that the outlook for our exporting industries and the motor industry in particular is a long slow decline from which there will be no return.