We must first see how sales of British cars in Spain respond to the new opportunities offered by the reduced duty quotas opened on 1 July. Meanwhile, we are proceeding with the negotiations on Spain's application to join the European Community, which will lead to the elimination of all import duties between us.
Will my right hon. Friend comment on the fact that the so-called reduction in tariffs that we now have is merely a sop, in that, up to the 1600cc level, Spain can send over 50,000 cars into Britain, whereas my workers in Longbridge can send only 997 vehicles to Spain? If we wait until Spain joins the European Community, we shall wait a very long time.
My hon. Friend will know that the new Spanish quotas have been open for only four weeks. They allow for 5,000 cars between 1275cc and 1600cc, and 10,000 cars of a higher cubic capacity, of which British Leyland has a large quota. I entirely agree with my hon. Friend that the position is not satisfactory, but it is a considerable improvement and was widely welcomed by the House when announced earlier this year.
How many more excuses will the Government trot out before they deal with the Spanish problem? The Secretary of State was very scornful just now about my hon. Friend the Member for Norwood (Mr. Fraser). Does he recall that when he was previously in the Department of Trade some years ago he told me that he would do something about the problem?
The new quotas were negotiated before either my right hon. Friend or I became part of the Department. They were welcomed in the House as a step forward. No one thinks that they go far enough. The long-term solution is to remove all duties between Spain and the United Kingdom. I hope that that will happen after a minimum transition period when Spain joins the European Community.
Does my right hon. Friend recall that the welcome to which he referred was heavily conditioned by the assurance given to me by the previous Secretary of State that Britain would be given the lion's share of the reduced tariff quotas? That has not happened. Does my right hon. Friend also recall the assurance that the tariff discrepancies would be removed by the introduction in Spain of a VAT system to replace the luxury and other discriminatory taxes? Can my right hon. Friend give us any news on that front?
My hon. Friend will be pleased to learn that Spain has committed herself to introducing VAT before the end of next year. I hope that that will be an improvement. British Leyland has been allocated nearly one fifth of the reduced duty quota for small cars, which will enjoy the biggest cuts in duties, and one tenth of the quota for larger cars. British Leyland has done as well as any company in that regard. I recall the warm welcome that my hon. Friend gave to the agreement on 15 March.
That is an interesting idea, but I think that the hon. Member and the House are a little unfair. The quotas have been open for only four weeks. We must see how they go. The quotas are renewable later and we shall have to see what progress is made. It is important that all the duties should be removed. That will not happen until Spain joins the European Community, and it is in the British interest to have the shortest possible transition period for that very reason.