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State assure us that the RNDQ at Portsmouth will not be vacated until proper provision has been made for females at the military corrective training centre at Colchester? Or does the Department intend to turn the female institutions of the services into the same sorry state as our civilian establishments?Mr. King : I am afraid that I cannot comment on that, but I shall look into the matter.
Mr. David Nicholson (Taunton) : I welcome my right hon. Friend's robust promotion of a powerful role for the Royal Navy and the British nuclear deterrent, which contrasts with the policies of ex-CND and continuing CND Opposition Members. Will he confirm that the Royal Navy and the mercantile marines of the international community will continue to benefit from the work of the Hydrographic Department in Taunton, and will that work be effectively resourced by his Department?
Mr. King : I certainly hope so. As my hon. Friend knows, under its new agency status, the department is making an encouraging start. I had the pleasure of opening it a short time ago with my hon. Friend, and I hear encouraging reports of some of its new freedoms. It is obviously a centre of excellence, and we recognise its significance.
Mr. Gavin Strang (Edinburgh, East) : Does the right hon. Gentleman acknowledge that one of the reasons why it would have been wrong to close Rosyth is that it would mean concentrating all these bases on England's south coast? Does he accept that that argument applies particularly to Rosyth, not just because of its geographical location but because of the Scottish people's proud history of participation in all Britain's armed services? That crucial argument will have as much force after the election as it has now, regardless of who is in government.
Mr. King : My decision was based on a consideration of what I thought were strategic grounds. It also made good sense, in that it achieved the savings that are necessary to maintain the most effective front line and, compared with the alternatives, it involved less disruption for the people concerned. We looked at a range of options, one of which, as the hon. Gentleman knows, was the possibility of closure. I chose the most sensible option on a range of considerations. My decision also took into account, as I made clear that it would, the overall impact and the economic impact on the area, which my right hon. Friend the Secretary of State for Scotland made sure that I recognised well. We also recognised the significant contribution that Scotland makes to the Royal Navy.
Dame Peggy Fenner (Medway) : I am grateful to you, Mr. Speaker. You might well have expected it to be too late for me to be interested in what happens to the Royal Navy dockyards, having had in my constituency one of the first to close under an earlier peace dividend. Will my right hon. Friend accept that I share his anger at the hypocrisy of Opposition Members, who for weeks have been bleating about the peace dividend, but when it happens in a little rationalisation in their dockyards they want to know why. My dockyard, Nelson's dockyard, was the most famous in the country. Will he offer Opposition Members the consolation that, before the recession, unemployment in my constituency had been reduced to 3.7 per cent.?
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Mr. King : I very much agree with my hon. Friend. I entirely understand her preamble and her feelings at this moment. It is incredible that the Opposition--with respect to those on the Opposition Front Bench ; I do not mean this personally--do not even think that defence justifies a seat in the shadow Cabinet.
Ms. Hilary Armstrong (Durham, North-West) : Will the Secretary of State confirm the allegation that yesterday, en route to the naval base at Rosyth, a major convoy carrying nuclear warheads broke down in my constituency at Castleside? I understand that this is the second incident of that nature, and my constitutents--
Mr. Speaker : Order. With great respect, the question must be related to the statement. I think that this refers to a different matter.
Ms. Armstrong : The convoy was on its way to Rosyth.
[Interruption.] I too have loyalty to my constituents, and they are concerned that they may have been prey to a terrorist attack because the convoy was not proceeding in a proper manner.
Mr. King : That question does not arise on the statement, but I will look into the hon. Lady's point.
Sir Ian Lloyd (Havant) : Do not the vigour and concern expressed this afternoon convey a clear message to a distinguished visitor to our shores, President Gorbachev, who has come to the west seeking real resources which he would presumably describe as a peace dividend in Russia? Are the Government confident that the real resources released in the United Kingdom will not be devoted to the Soviet Union at a time when it is not releasing resources from a diminution of the Russian Navy? Is he confident that if the evidence about the strength of the Russian navy which is reaching the Government at all times disproves the allegations the policy will not be continued?
Mr. King : There seems to be some story that the Russian navy is increasing in size. That is not correct. A considerable scrapping programme is taking place. However, I accept that new vessels and new submarines that have been launched are highly capable and worthy of full respect. Having said that, I was told that about 50 per cent. of the present Soviet GNP was going into defence. Given the scale of the burden that it is carrying, it is unthinkable that we should engage in any economic support if that scale of military investment continues.
Mr. Harry Ewing (Falkirk, East) : As a fellow Scot, Mr. Speaker, I apologise for the behaviour of the hon. Member for Dunfermline, West (Mr. Douglas) in complaining about people carrying cards.
Mr. Speaker : Order. I would prefer the hon. Member to ask a question.
Mr. Ewing : Over the past year, the hon. Member for Dunfermline, West has carried more cards than I have credit cards. He has never forgiven my hon. Friend the Member for Clackmannan (Mr. O'Neill) for winning back the safe Labour seat that he threw away.
The Secretary of State for Defence has just announced that 1,000 people will lose their jobs at Rosyth, making 2,500 jobless altogether. Is that not cause for alarm? Has the right hon. Gentleman become so blase and
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unconcerned about unemployment that the prospect of 2,500 people losing their jobs does not give him cause for alarm?Mr. King : I said that I take any job losses very seriously, but the hon. Gentleman's question misrepresents the situation. He said that 900 people will lose their jobs, but I have made it clear that we hope that a significant number of them will be relocated in other Ministry of Defence posts. The hon. Gentleman will understand why I enter that caveat.
I hope that it will be of some reassurance to the hon. Gentleman to know that the Northern Ireland squadron will not move until 1993. The type 42s, which account for the bulk of the jobs, will not move until 1993-94, and then progressively. My right hon. Friend the Secretary of State for Scotland is concerned to see that every assistance is given. He is active in other parts of Scotland as well, to ensure that help is given to whatever number of people may lose their jobs.
Mr. Patrick Nicholls (Teignbridge) : Does not my right hon. Friend consider it grotesque that he should be criticised over job losses when the Labour party conference has twice voted by an overwhelming majority to reduce defence spending by £9 billion? How many jobs would such a cut cost? For Labour to criticise possible defence costs carries about as much conviction as if the devil were to come to the House to criticise a decline in virtue.
Mr. King : I regret having come to the House to announce that the changes made under our programme will affect 900 civilian jobs. However, I hope that a number of those affected will be relocated in other Ministry of Defence posts. There are arguably 50,000 jobs in Scotland alone that are totally connected with or affected by defence. Any independent assessment of Labour's defence policy--although we know little of it--must suggest that, under it, 25, 000 of those jobs would go.
Mr. O'Neill : Will the Secretary of State confirm the authenticity of the allegedly leaked documents? Is it not sheer hypocrisy, when documents come to light showing the Government's intentions, that Ministers try to distort the issue by smearing hon. Members, rather than answering the questions that such documents raise? Will the right hon. Gentleman say, yes or no, whether the document to which he referred gave the timetable, the date, and the identity of the base as Rosyth? Does he deny that?
Mr. King : I made it absolutely clear to the hon. Gentleman that studies were made, and I repeatedly said that no decision was taken. I draw to the attention of the House that another member of the Opposition Front Bench shows no embarrassment about a leaked document from a naval base.
Mr. King : I do not touch leaked documents, thank you very much. I explained to the hon. Gentleman that studies were undertaken, and that they contained possible timetables, and so on. A range of options were considered. They came before Ministers, and Ministers took decisions.
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Points of Order
4.30 pm
Mr. Robert Hayward (Kingswood) : On a point of order, Mr. Speaker. I do not want to take up Plaid Cymru's time, and I apologise for dashing in and out of the Chamber this afternoon. However, I have received news that Avon county council has lent £6 million to Western Isles county council. Clearly, the ramifications of the Bank of Credit and Commerce International affair are more extensive than previously thought. Would it be appropriate to raise the matter during next week's Consolidated Fund debate ? Is there, indeed, any means of raising it sooner than that ?
Mr. Speaker : The Consolidated Fund debate is a wide one. If the hon. Gentleman submitted a subject, I would consider it carefully.
Ms. Marjorie Mowlam (Redcar) : On a point of order, Mr. Speaker. The Financial Times and The Wall Street Journal report this morning that, in March and October last year, the Bank of England had prima facie evidence of fraudulent documentation at BCCI. On 8 and 15 July this year, the Economic Secretary to the Treasury told the House that the Treasury had known nothing until June. Should he not return to the Chamber immediately to clarify that statement ?
Mr. Speaker : I cannot be expected to adjudicate on what Ministers say at the Dispatch Box. There are other methods of raising the matter-- possibly during the Consolidated Fund debate.
Mr. Graham Riddick (Colne Valley) : On a point of order, Mr. Speaker. Are you aware that the parliamentary Labour party voted this morning for the House not to sit on Fridays ? Labour Members voted for a four-day week : they voted to become part-time Members of Parliament. [Interruption.]
Mr. Riddick : I am just coming to my point of order, Mr. Speaker.
Mr. Speaker : Order. We are under great pressure today, and I am not a member of any party.
Mr. Riddick : May I just ask you to assure me, Mr. Speaker, that you will do all in your power to protect the interests of Back Benchers, so that we do not lose time and business on Fridays ?
Mr. Speaker : I will give the hon. Gentleman that guarantee. It is my constant desire to protect Back Benchers' interests, and that is what I am anxious to do this afternoon--to protect the interests of Plaid Cymru Back Benchers, whose debate is to follow.
Mr. Tam Dalyell (Linlithgow) : On a point of order, Mr. Speaker. Yesterday, with the widespread approval of hon. Members, you made very clear your view about ministerial statements in the House, which is reported fully in this morning's press. Can you persuade the Foreign Secretary--who made a speech yesterday about some very important matters relating to this country's participation
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in military action--to come to the House, possibly on Friday, when I understand that the Prime Minister is coming?This is especially important in the light of the frantic appeals from the United Nations Children's Fund and Robert Smith, and those of Prince Sadruddin Aga Khan on behalf of the United Nations High Commissioner for Refugees, about the position in Iraq, where people who have been bombed into the stone age in certain areas may simply be eliminated.
Mr. Speaker : I am sure that the Leader of the House, who is sitting on the Front Bench, has heard what the hon. Gentleman has said. It is not for me to require Ministers to come here ; yesterday was a rather special case. There will be other opportunities for the hon. Gentleman to raise the matter next week, such as the summer Adjournment debate, the Consolidated Fund debate and the last day of the Session, next Thursday. There is plenty of scope.
Mr. John Home Robertson (East Lothian) : On a point of order, Mr. Speaker. May I ask you to examine the rather injudicious words used by the Secretary of State for Defence at the beginning of his statement, when he was explaining why he did not make that statement yesterday? As a humble and simple Back Bencher, I have no idea what went on within the usual channels or what led to the planted question that was asked yesterday. I find it surprising, however, that the Secretary of State should say today that he was effectively prevented by the Opposition from making an oral statement. Can you confirm, Mr. Speaker, that any Minister of the Crown has the right to apply to you to make an oral statement in the House, and that that is what should have happened yesterday?
Mr. Speaker : That is true. Ministers sometimes come to me to ask whether they may make statements, but the lesson of yesterday is that I, too, was left out of this equation. I think that things might have been very different if I had been brought into it.
Mr. D. N. Campbell-Savours (Workington) : On a point of order, Mr. Speaker.
Mr. Campbell-Savours : I am sorry, but I have just heard my hon. Friend the Member for Linlithgow (Mr. Dalyell) say that the Prime Minister intends to make a statement on Friday on the G7 summit. Can I put it to you that you should protest on behalf of many hon. Members, who find it extremely difficult to be here on a Friday? It can take as
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long as six hours for us to return to our constituencies. It completely destroys Friday as a day in our constituencies. It is wrong that important business should be--Mr. Speaker : Order. I really do not think that the House of Commons can be run for the convenience of some hon. Members. If the discussions end on Thursday, perhaps the Prime Minister should come here at the first opportunity to make a statement. I have not previously heard that he intended to do so. It has not so far been communicated to me officially.
Mr. Campbell-Savours : Further to that point of order, Mr. Speaker.
Mr. Speaker : Order. I cannot take it.
Mr. Campbell-Savours : But you let--
Mr. Speaker : Order. The hon. Gentleman must ask about it tomorrow during business questions.
Mr. Campbell-Savours rose --
Mr. Speaker : It is not a matter for me. Ask about it, please, during business questions tomorrow.
Mr. Campbell-Savours : You have repeatedly, Mr. Speaker--
Mr. Speaker : Order. I repeat that the hon. Gentleman should ask about it at business questions tomorrow. It is not a matter for me.
Mr. Campbell-Savours : On a point of order, Mr. Speaker.
Mr. Speaker : No, please sit down.
Mr. Campbell-Savours : You have repeatedly said to the House--
Mr. Speaker : Please sit down. The hon. Gentleman is taking time away from other hon. Members.
Mr. Campbell-Savours rose --
Mr. Speaker : Sit down, please! There are plenty of other opportunties to raise this matter. It is not a matter for me.
Mr. Campbell-Savours : It is all right having a constituency in Croydon. Mine is in Workington.
Mr. Speaker : Order. Ten-minute Bill--Mr. Phillip Oppenheim.
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Restraint of Trade (Trading in Motor Vehicles)
4.36 pm
Mr. Phillip Oppenheim (Amber Valley) : I beg to move,
That leave be given to bring in a Bill to abolish restrictive practices and cartels in the trading of motor vehicles.
Consumers in Britain are being ripped off by having to pay far more for their cars than is the case in many other European countries. A Consumers' Association report shows that a Peugeot 405 costs £2,000 more in Britain than in Belgium, while a Ford Orion 1.4 litre costs nearly £3,000 more.
I accept that some surveys have exaggerated the differences in some respects by not taking special factors such as discounts into account, but even when they are taken into account there is still a massive difference. The price variations, with the fairly free markets in America and Japan, are even more startling. [Interruption.]
Mr. Speaker : Order. Can I just say to the hon. Member for Workington (Mr. Campbell-Savours), who is mouthing things from a sedentary position, that they looked suspiciously like threats aimed in my direction.
Mr. Campbell-Savours rose--
Mr. Speaker : The best thing that the hon. Gentleman could do would be for him to go to his constituency now.
Mr. Oppenheim : Car buyers in Japan and the United States consistently pay 30 per cent. less for their cars, ex-tax, than they do in the United Kingdom. The main reason for that is the trade barrier, known, somewhat ironically, as the gentleman's agreement which restricts trade in vehicles.
However, from the end of next year that is due to be superseded by a European Community-wide trade barrier which will cover not just markets like Britain, France, Spain and Italy--which already have national trade barriers on cars--but also the free-trading European nations, such as Germany, Holland, Belgium and Denmark.
The Commission has also been proposing that cars made in Japanese-owned United Kingdom plants should be classed as Japanese and therefore be subject to quota limits, even though they have well over a 60 per cent. European content. That is one of the daftest suggestions ever to come out of the European Commission. It would mean that cars made in American-owned Ford and General Motors plants in Europe would be counted as European and have free circulation within the Community, but that cars made in Japanese- owned plants in Europe would not, even though cars made in Honda's American plants would be counted as American and would, therefore, be subject to no import quotas.
The Commission sometimes says that this is not meant to be taken seriously- -that it is just intended as a bargaining counter in its talks with the Japanese--but history has shown how capable the Commission is of concluding covert trade deals. I have no doubt that most of the Commissioners hope that, while on the face of it there will be import quotas only on Japanese- produced cars, surreptitiously this will include limits on the number of cars made in Japanese-owned plants in Britain. The implications for job creation in the United Kingdom are
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serious, unless cars produced at the Honda, Nissan and Toyota plants in Britain can be freely sold anywhere within the Community, just like the cars of any other European producer.The problem with trade barriers is not only that they raise prices for consumers, but that they restrict choice. That is especially damaging in the case of the gentleman's agreement and other car trade quotas. In Japan there is a class of car called the microcar--small high-tech hatchbacks with engines below 550 cc. They typically cost between £2,000 and £4,000 ex-tax. British consumers do not have access to such cars because trade barriers compel Japanese producers to make up for low volume with high value by concentrating on large and more expensive cars. The microcar would be a boon in our traffic-choked cities. It is less environmentally damaging than larger cars and it would offer low-cost, high -tech motoring to people whose income now gives them the choice to buy only second hand cars or geriatric eastern bloc models, but such people are being denied the opportunity to buy the microcar.
Behind the gentleman's agreement and other such quotas lies pressure on the Commission to introduce an EC-wide quota from a cartel of large European and American car manufacturers who are afraid of what open competition would do to their profit margin. Of course, they would not put it quite like that. They say that they need to protect jobs. I understand that argument and I have some sympathy for it, but it is not new. Indeed, when 150 years ago almost to the day Richard Cobden was elected to this place as the hon. Member for Stockport on a free trade and anti-Corn Laws platform, the Stockport Advertiser , which had supported the Tory candidate, who, I am ashamed to say, backed the retention of the Corn Laws, bemoaned the result as follows :
"To the working classes must the shopkeepers look for support and if they have little or no money as a result of this measure after the purchase of their cheap loaves where will you sell your cottons, your silks, your teas and your sugars?"
The idea that consumers are also producers and that they need protection to be able to afford to buy goods from other producers is superficially alluring but wholly spurious. First, those with the greatest lobbying power inevitably receive the most protection and subsidies. At best, trade barriers shelter jobs in protected industries in the short term, but they compound inefficiency and put off the evil day when the industry must sort out its fundamental problems. Meanwhile, many jobs are lost elsewhere as people pay over the odds for goods, and resources are diverted from efficient to inefficient producers.
In the case of cars, according to a survey by the Organisation for Economic Co-operation and Development, import quotas add about £4 billion to the cost for British consumers. What could all those resources have achieved and how many other jobs could have been created in other industries if that money had been freely directed by the choice of consumers?
One of the main arguments used by those who want trade barriers is that Japan itself is a closed market, and I shall deal briefly with that issue. It is interesting that as Madame Cresson was saying that Japan was an "hermetically sealed market", Peugeot--the most virulent of the lobbyists for tougher trade barriers in Europe--was on target to increase its sales in Japan by 21 per cent. despite a 13 per cent. fall in the Japanese market. Of
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course, other European manufacturers have not tried even to get into the Japanese market. For example, Renault's chairman, Raymond Levy, is quoted as saying that he was not bothered about Japan because it was not an important enough market. However, the prize for hypocrisy must go to Volkswagen whose chief executive, shortly after announcing that his company had created 750 new jobs to boost production for the Japanese market where its sales were booming, warned that the Community should limit access to Europe for Japanese cars. Incidentally, German car sales to Japan exceed in value Japanese exports to Germany.The argument is that Europe must close its market because the Japanese trade unfairly represents the worst type of self-serving special pleading by European car manufacturers. The truth is that it has been far too easy for far too long for European and American industrialists to make exaggerated claims about trade barriers in order to excuse their own failure to market competitive models domestically and in Japan. However, the insincerity of car producers can be illustrated by the fact that the American producers, who are part of the lobbying effort for trade barriers in the EC, sell literally millions of Japanese-made vehicles under their own names in Asia and in the United States.
The problem is not that the Japanese market is closed, but that Japanese producers are more efficient. Toyota's lead time for a brand new model is three-and-a-half years compared to Volkswagen's six years. While Toyota assembles a Corolla in 13 hours, it takes Volkswagen 20 hours to bolt together a Golf. We should learn from their processes instead of taking the easy option of erecting trade barriers because the cost of those barriers is huge. According to an EC Commission report, the removal of all internal EC barriers would result in a gain of £50 billion to the EC economy, and intensified competition would reduce monopoly profits, creating5 million new jobs and cutting prices to the consumer by an overall 6 per cent. If the EC Commission can see such huge advantages to free trade within the EC, why is it so blind to the wider benefits of freer external trade?
There is a broader issue. We are now in danger of seeing the global economy break into competing trade blocs as happened in the 1930s. According to an OECD report, only four of the OECD's 24 industrialised member states ended the 1980s with freer and more liberal trade regimes than they had at the beginning. Covert trade restraints such as quotas and spurious anti-dumping duties have multiplied and bypassed the general agreement on tariffs and trade, covering everything from semiconductors to steel, and televisions to photocopiers.
The danger is not merely that of a trade war between the three trading blocs based on north America, Europe and east Asia, but of tensions with other areas. Goods from the Soviet Union and other eastern bloc countries are being restricted by the European Community. Thus, as they grope towards a free market system, we appear to be telling them that our espousal of the free market ends when it comes to the very goods that those countries are able to produce competitively, such as steel, food and textiles.
According to a recent World bank report, the trade barriers of wealthy countries against third world nations cost the poorer nations more than the total of the aid that we send them. Therefore, trade barriers impoverish not only us, but hit those that are far less well off. They do not even help protected industries ; they merely ensure that
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they become ever less competitive. It is time that we took a long-term view and rejected the craven entreaties of the cartel of European and American car manufacturers and ended the great rip off of our consumers by abolishing all trade restraints on cars at home and in Europe. In doing so, we would help not only consumers, but the European industry by making it face the need to tackle the underlying uncompetitiveness which is at the root of its problems.Sir Hal Miller (Bromsgrove) rose --
Madam Deputy Speaker (Miss Betty Boothroyd) : Does the hon. Gentleman wish to oppose the Bill ? If so, when I put the Question at the end of his speech he must voice his opposition. Is that understood ?
Sir Hal Miller : Although I agree with much of what I think that my hon. Friend is aiming for in the last part of his speech, I must point out that it was only because of the voluntary restraint agreement--negotiated under Government auspices, let us make no mistake about that--between British and Japanese manufacturers that he and my hon. Friend the Member for Derbyshire, South (Mrs. Curry) are about to benefit from the creation of a Toyota plant in their area. There is no prospect that Japanese manufacturers would have been encouraged to set up the manufacturing centres which are providing for our indigenous manufacturers the excellence in standards of training, of employment and of quality and which are teaching us how to compete more effectively and no possibility that the Toyota, Nissan and Honda plants would have come to this country but for the voluntary restraint arrangement.
Therefore, although I agree that the arrangement has a limited usefulness, it has proved most beneficial for this country and for all hon. Members who have constituencies that contain car plants and component-making plants. The result of the introduction of new manufacturing methods and new purchasing methods such as we have seen at the Nissan plant in Sunderland and such as we are beginning to experience with Toyota--I declare an interest because I hope to be a supplier to Toyota--and the standards that they demand of our component plants are uplifting our whole industrial effort and our employment attitudes in much of our industry.
I take exception to the rather cheap jibes about the Consumers' Association report at the beginning of my hon. Friend's remarks. On the basis of a little further research, he will find that the report was based on a comparison of list prices and took no account of the discounts available, of the differences in specification, of exchange rate movements or of differences in inflation rates. Those same mistakes were perpetuated in the consultant's report by Karl Ludwigsen for the Monopolies and Mergers Commission.
I draw the attention of the House and of my hon. Friend to the report in the Financial Times earlier this week on the research conducted by the firm A. T. Kearney on behalf of General Motors. It examined 98,000 invoices and demonstrated that in many of the areas of purchase of volume cars, the on- the-road price in this country was lower than that elsewhere on the continent. Before we jump to easy conclusions, we should bear in mind the commercial facts and the efforts being made to provide not only jobs in this country, but better jobs, better terms of
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