Motor Industry

Part of the debate – in the House of Commons at 4:21 pm on 12th December 1983.

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Photo of Mr Roger King Mr Roger King , Birmingham, Northfield 4:21 pm, 12th December 1983

My hon. Friend has pre-empted what I was about to say. He has stolen my thunder, but I could not agree with him more.

Abolishing the car tax will probably cost the Government £600 million but, given that we spend £1·3 billion on regional aid, secular aid for a particular industry is money well spent. If the Government told the motor industry that they would think again about the 10 per cent. special car tax, they would find the industry ready and willing to discuss jobs and investment in car assembly and in components.

The industry's problems are many and varied. There are the European bureaucrats and their exhaust emission controls, and there are distribution problems and so on. No doubt some of my colleagues will refer to those points. I wish, with some vehemence, to draw attention to two further problems.

First, there is the Nissan development in this country. It has been likened to a Trojan horse. The development needs to be considered very closely. The Guardian on Saturday made headline news of the fact that Nissan was furtively engaged in negotiations with the Government over the Austin-Rover factory at Longbridge in my constituency. According to the report, Nissan wished to purchase the factory and produce its own range of cars there.

The incomes of 13,500 of my constituents depend on the development of that factory. That sort of scaremongering does their hearts and minds no good at all. They are told that they could wake up one morning and find themselves obliged to do press-ups and physical jerks before starting to bolt the vehicles together. I am happy to be assured by Austin-Rover, the Government and Nissan that Nissan has no intention of involving itself with Austin-Rover at Longbridge.

Austin-Rover is working nicely with Honda, in the manner in which we want such things to be done. We do not want forced marriages; we want arrangements between various companies throughout the world, and a cross-fertilisation of ideas on suspensions, engines and transmissions. That is the way forward. The example of the Triumph Acclaim shows how that cross-fertilisation can work. In 18 months' time there will be the development of the BL-Honda luxury executive car to replace the Rover range. That will be the first real evidence of joint design leadership and production know-how. It may be said that British Leyland is exactly the same as Nissan—that BL is assembling the Triumph Acclaim in this country. However, the company's policy is to improve the United Kingdom content of that vehicle, and within the next three or four months something very similar will be produced at Longbridge which, one hopes, will contain many more United Kingdom components. Evolution is taking place, and evolution is always more cost-effective and more useful than a forced marriage.

Let us privatise by all means. I have no desire for the company to remain attached to the state. However, when the time comes, the work force should be given a slice of the action. They should become investors in the project. A worker who owns part of the business will be much more diligent.

How many cars does Nissan plan to build in this country—200,000, 250,000 or as little as 50,000? We have heard all those figures. What is certain is that the local content of the car—out of the total value of the car, including labour and all the metal and goods inside the car — must hover at about 80 per cent. as a percentage of ex-works value. Only that percentage will balance the employment loss caused by competition from Nissan United Kingdom, and it will do so only if one-third of the projected output is exported.

Let us not fall into a trap. We could bribe a Japanese car manufacturer to set up in a development area where jobs are needed and give that company several hundred million pounds, only to find that no more than 5,000 or 6,000 new jobs are produced, and a handful in the component industry, and that Nissan's market share in this country is taken from British Leyland, Ford and General Motors and, in addition, that those companies are not ordering so many components made in the United Kingdom. If that were to happen, there would be a decline in job opportunities in the industry and in the number of companies supplying the industry.

Nissan may be a Trojan horse which will finish off the industry just as it was beginning to flower once again. I would welcome a strong assurance that we will not accept anything less than a 90 per cent. British content and that the Nissan factory should produce at least 150,000 cars, with a guarantee that 50,000 will be exported.

Spanish imports represent a grave injustice. The question of Spain's entry into the European Community awaits the travail of time. 1986 has been suggested but it may be, after the Athens summit, that the date of Spain's entry will be 1987 or 1988. We need to renegotiate our arrangements with Spain for the import and export of cars. At the moment, British Leyland Austin-Rover is entitled to export to Spain at a reduced import tariff of 19 per cent. 970 Metros between 1 litre and 1,300 cc and 1,000 other vehicles. In the all-important market sector of vehicles under 1,000 cc—particularly satisfactory in the Spanish market—we can send only at an import duty rate of 37 per cent. However, Spain can send an estimated 50,000 or 55,000 Vauxhall Novas to us this year at 4·4 per cent. import duty. That is entirely unsatisfactory.

We imported about £777 million of goods from Spain this year, and exported £865 million of goods to Spain. To the uninitiated, that is a positive balance of trade. However, in 1982 3·7 million British tourists went to Spain, giving Spain an income of £705 million. We obtained only £80 million from Spanish tourists. We are, therefore, in deficit with Spain to the tune of £537 million. That is an untenable and indefensible situation. Longbridge is ready to produce the required number of Austin Metros for that market. That car is ideally suited to that market. We are prepared to negotiate a satisfactory figure. Austin-Rover would probably settle on 10,000 cars per year as being satisfactory. The distribution set-up would probably not handle more.