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9.42 pm

Mr. Edward Davey (Kingston and Surbiton): I agree with everything that the hon. Member for Poole (Mr. Syms) said. I want to focus on his second point because I have a constituency interest in the matter, and it is also important to many vehicle and business owners throughout the country. Livelihoods are at stake. Although I accept that Conservative Members and others wish to raise issues of principle about flags, I believe that our priority should be businesses.

The American Carriage Company on London road in Kingston is a successful, long-established family firm, which is owned by the Ouvaroffs. It could be put out of business if the Government do not have a speedy, major rethink about the regulations' application to a tiny section of the car market, namely the imported American car market, which the hon. Member for Poole mentioned.

Some owners of American cars live in my constituency. Mr. Don Rolt, who owns an 88 Pontiac Fiero, is worried about the implications of the regulations for him and other owners and aficionados of American cars.

We are considering between 50,000 and 75,000 car owners; that is a lot of people. I should not be surprised if every Member of Parliament had a constituent who owned an American car and could be affected by the regulations. Between 100 and 200 businesses will also be affected. I want to explain the services that they provide to our constituents. About 40 businesses and organisations are directly involved in the importation and sale of American cars. They are involved in sourcing bespoke vehicles. We are talking about a very low-volume market: not many end-users desire these cars. That is why the sales and importing business is so specialised.

As well as those involved in the sales and importing businesses, many people are involved in after-sales service. They service the cars, provide the equipment to do so, and ensure that all the Government safety requirements are dealt with. Many people are employed, including qualified mechanics and servicing personnel. In addition to the 30 or so servicing businesses, about 20 companies are involved in supplying parts to the garages and owners who service the cars. People specialise in providing certain parts, such as the special glass and tyres that American cars need.

It does not end there. Other businesses are involved, including specialist insurance companies. In the larger insurance companies, there are special sections dedicated to insuring these cars, which are often of very high value and require specialist insurance capabilities. Finance houses and warranty suppliers are involved, and there are

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also clubs where people who own the vehicles get together and organise. We are, therefore, talking about quite an extensive number of people and businesses.

The Minister should be in no doubt about the effect of the measure. Some people say that this is a small niche market. Compared with the overall market, of course it is. However, a lot of people and businesses are involved, and that is why we should pay special attention to the American car business. I hope that the Minister will show some movement on this matter, and show that he is sympathetic to these demands.

Mr. Simon Thomas (Ceredigion): I have listened to what the hon. Gentleman has said about the American car market with some interest. He said that all constituencies probably contained owners of American cars. That may well be the case, although no one from my constituency has contacted me on the matter. However, between 5 and 10 per cent. of my constituents drive around with a Welsh flag incorporated in their number plates. The proposal, as well as affecting American cars, will make criminals of those ordinary, law-abiding citizens. I hope that the hon. Gentleman will address that point as well.

Mr. Davey: As I said earlier, I support everything that the hon. Member for Poole said, and I intend to address that point. However, I want to concentrate on the people that I have been describing, because they have businesses and they have investments in these cars, some of which are worth an awful lot of money. They put their hard-earned savings into them. Their hobby, their pleasure, their pride and joy is going to be affected by the regulations, and I make no apology for taking up some of the House's time discussing the issue. The regulation is not justified. It is bad government, bad economics and bad politics.

I want to explain a little bit about the technicalities. The hon. Member for Poole performed some of that task for me, but it is important for the House to realise what is involved. This is, as the hon. Gentleman said, about the size and space allowed for the fixing of a rear registration plate. If the regulation goes through unamended, or is not amended in due course, more than 90 per cent. of left-hand drive American cars imported to the UK will have to be modified. The hon. Gentleman went into some detail about the modifications required. If anything, I think he underplayed the problem of making the modifications.

One of the reasons people own American cars is for their look, their aesthetic value. [Interruption.] People drive round in them and want people to look at them; they want people to see that they have an American car. They are proud of their car, and quite rightly so. However, if they have to modify the boot and the rear of the car, it will change it to some degree. It will no longer be a genuine American car, and a lot of people will no longer want to buy it. The modification will reduce these cars' value.

Mr. Bercow: I am really quite shocked by what I have just heard, and I am not easily shocked. Did the hon. Gentleman, while making his point about the attractiveness and physical beauty of American cars, hear the hon. Member for Ellesmere Port and Neston (Mr. Miller) chunter from a sedentary position "No style"? I do not want

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to be unduly provocative--I rarely am--but does the hon. Gentleman agree that it ill behoves an enthusiast for the displaying of the EU symbol to lecture others about style?

Mr. Davey: The hon. Gentleman makes his point in his usual extravagant manner--flamboyant, perhaps, or even stylish--but I do not want to be tempted down that route. I have serious points to make which are not about style or substance.

I was talking about modifications. It is not as if those who are importing American cars, or buying them, were not prepared to make modifications--[Interruption.] If the hon. Member for Ellesmere Port and Neston listens, he will realise how serious this is. People in his constituency will be affected. The hon. Gentleman laughs again: I find that shocking.

Those who buy such cars have to make modifications in order to conform to regulations already imposed on them by the British Government--modifications involving their lights, for example. It is not as if car owners and businesses were not used to making modifications; the question is whether this is a modification too far, which will completely change the way in which people view cars. I believe that it will. I believe that it will eventually destroy the market--not the overall market for cars, which will continue because, I am delighted to say, we have a European single market, but the market in the United Kingdom that is owned by British business people and used by British customers.

People will go abroad, to continental Europe, to buy their American cars. That means that we shall be exporting jobs. It will be child's play for someone who wants to buy an American car to get to Holland, where the car will be approved by the Dutch authorities and can then be imported. The Government and other authorities here will have to accept that, because the car will have been approved by another member state. The Government have been defeated in their regulatory enthusiasm by the fact that we have a single market.

This is an example of the European Commission's riding to the help of British industry. The British Government, in this instance, are doing very little to support British industry. I have a letter from D-G XV, which was sent to someone who wanted to complain about the Government's draft regulation, signed by an official called S. Lecrenier. She--I think it is a she--says at the end of the letter that the Commission is to call on the British authorities to include left-hand vehicles in the specialised vehicles category. The hon. Member for Poole mentioned that.

The Government would have the support of the European Commission if they decided to exempt imported left-hand drive American cars. They would not be isolated; they would be joining the Commission in ensuring that there was no barrier to trade. In this case, the European arguments are on our side and also on the Conservatives'--which is good, as it happens very rarely.

The hon. Member for Poole made a couple of points about the way in which the Department of the Environment, Transport and the Regions and the Department of Trade and Industry had gone about things. Their initial consultation suggested that they were quite happy for registration plates the size of those on motor cycles to be fixed on all vehicles, but after that, and their second consultation, they changed their minds. Worse

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still, during the consultation those whom I am representing tonight--people who import American cars--were not themselves consulted, and received no consultation documents. They therefore could not register their disapproval at that stage, which meant that the regulatory impact assessment made by the Government following the first consultation did not take account of the industry--of all the people who would be affected. The whole consultation exercise has been discredited, which is another reason why the Government should think again.

When we begin to analyse the pros and cons of the fact that the Government have yet to provide an exemption for imported American vehicles, we are prompted to ask what is behind it. Why are they deliberately pushing the regulations, which will hit that small and entrepreneurial sector so hard? One thinks that there might be some conspiracy. Perhaps it is the Society of Motor Manufacturers and Traders in this case that is trying to ensure that there is no extra competition in the sale of cars.

I would not want to impugn that organisation unfairly, but the Government are rightly putting pressure on it, to reduce car prices and perhaps this is one of the pay-offs. I hope that the Minister will be able to say that that is not the case. If it is not, I wonder whether he could comment on something that I have heard: officials at the DTI who are responsible for trying to promote competition in the motor vehicle market are concerned about the attitude of DETR. That is not joined-up government. One part of Whitehall is saying, "Let us promote competition" and another part wants to pass protectionist regulations.

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