Motor Industry

Part of the debate – in the House of Commons at 5:50 pm on 12th December 1983.

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Photo of Alan Williams Alan Williams , Swansea West 5:50 pm, 12th December 1983

I congratulate the hon. Member for Birmingham, Northfield (Mr. King) on giving us the opportunity to debate the motor industry. I apologise to the Minister as I shall have to leave the Chamber before the end of the debate because of a clash of commitments. It is not meant as a discourtesy, as the Minister is aware after many years of sparring with me.

By tradition, in Britain we welcome inward investment. Many of our greatest and best employers are overseas companies. About 1,500 American businesses operate here. In Wales we have done well in employment terms from Japanese investment. I know from my negotiations with Hitachi and Toshiba that speculation during negotiations can be widely inaccurate and damaging because it often stimulates reactions, which are reported in Japan and lead to considerable misunderstanding.

I shall confine myself to making a couple of points about Nissan. The Opposition certainly welcome Nissan so long as its operation here means more net jobs in the car industry and that it will not be at the expense of existing firms. We welcome Nissan so long as there is maximum opportunity for British component manufacturers.

When Hitachi was thinking of coming to Britain as an independent operation we had two guarantees. It was agreed that over the first few years Hitachi would phase in the use of British components to a specified maximum level. A further guarantee, supported by industry in Japan, was that any sets that it sold within the United Kingdom would count against the ceiling that the British industry had negotiated with the Japanese industry for imports. We had twin guarantees. I realise that individual cases vary, but I hope that the Department will endeavour to obtain similar guarantees from Nissan.

The motor industry is critically essential to Britain's prosperity. About 11 per cent. of our manufacturing output is contingent on the health of the motor industry. The steel, rubber, glass and machine tool industries are involved and the ramifications are enormous. That is demonstrated by British Leyland, which alone has 700 suppliers involved in putting the final vehicle together.

The motor industry has had a disastrous three years. It is now enjoying a temporary remission, but it is facing a dangerous and uncertain future, made even more imponderable because only one of the four major assemblers in Britain is British-owned. The policy decisions of the other three assemblers are taken outside the United Kingdom and interests other than ours are paramount.

It has been said correctly that one cannot separate the fortunes of the assemblers from the fortunes of the component makers. One might put that the other way round, since components make up about two-thirds of the final value of the product. One can, therefore, argue that the efficiency of the component manufacturers is doubly important to the health of the industry. It is imperative that, in our consideration of what has happened in the past few years and of what is likely to happen, we bear in mind the overwhelming need for economies of scale by the component manufacturers as well as by the assemblers.

A fuel-based industry was bound to be severely hit by the fuel price revolution of the 1970s. No mass market product was likely to escape a major world recession of that type, but I emphasise that world recession alone does not explain the crisis. I can demonstrate that by reminding the House of what has happened since the Labour Government left office.