The Work of the Department - Business and Enterprise Committee Contents

Examination of Witnesses (Questions 160-179)


14 JANUARY 2009

  Q160  Mr Hoyle: Of course.

  Lord Mandelson: Waving the flag!

  Q161  Mr Hoyle: Very much so. Can you get the ministers to back them?

  Lord Mandelson: However, I have nothing against the other hybrid cars that they others have.

  Q162  Mr Hoyle: Well, I have because we both know that is the problem, is it not? It is built in Japan, shipped to this country with no British parts whatsoever on it and no British jobs. The fact is the Australian Government have done a deal that you build hybrid in Australia. If the Australian Government can do that, why can we not do it?

  Lord Mandelson: We may well yet.

  Q163  Mr Hoyle: It is too late when ministers are already buying them. The answer is do not buy them, then they will build here.

  Lord Mandelson: This was either before my time or above my pay grade or both, I do not know! I just want to make this point. If you could have had more success than I did in producing a major Royal Mail van order for Leylands, I wish you had come to this earlier.

  Q164  Chairman: I hesitate to direct Lindsay, but he asked a very important question which he has not asked before, unlike the one about procuring cars, about the tax treatment of commercial vans, which is an interesting question.

  Lord Mandelson: The Chancellor made some adjustments at the time of the PBR on vehicle excise duty to help. If there are further specific proposals, I suggest you let me have them and I will pass them on to the Chancellor personally as he prepares for the Budget.

  Q165  Mr Hoyle: What can we do to ensure that Government procurement does support the British truck, van and car industry?

  Lord Mandelson: We can juggle the competing demands of hybrid, low carbon, environmentally friendly and British first. The way to do that is to make sure the hybrid environmentally friendly low carbon are being produced in Britain. That is what Ed and I and others are working on a strategy to help achieve.

  Q166  Mr Hoyle: But there is a great myth about the hybrid car anyway.

  Lord Mandelson: I think you are pushing me to the bounds both of my knowledge and Government policy here.

  Q167  Mr Hoyle: If a Jaguar is good enough for the Secretary of State, let us see the rest of the ministers in British built cars. Can you work on that?

  Lord Mandelson: There are competing pressures and obligations.

  Q168  Mr Bailey: You touched earlier on, I think the words were, examining or considering what could be done to assist the finance arms of the motor manufacturers. We have given billions to help the banks supply credit and we are aware of the failure to do so and the issues which arise from it. It seems to me totally illogical that we do not take steps to help non-banking funders, such as the finance arms of the motor industry where you could reasonably expect a very positive dividend in terms of stimulus of demand for key manufacturing products. I would welcome your thoughts on why we have not done it so far.

  Lord Mandelson: This is one of a number of issues raised with us by the car industry. I accept one route for us to help could be to see how the motor finance arms can be assisted in terms of their additional liquidity needs and this is something we are looking at. However, this has to be set alongside a number of competing requests from the car industry and we need to decide where to target resources and where to prioritise. We are not yet at the end of that consideration.

  Q169  Chairman: There are more jobs in the automotive distribution and retail sector than there are in the manufacturing sector, so, in fact, supporting sales does not just help the manufacturing sector.

  Lord Mandelson: And 10,000 more according to Tesco's yesterday and Sainsbury's the day before.

  Q170  Chairman: No, we are talking about the car sector in particular. There are a lot of jobs at stake in the showrooms and the garages of this country.

  Lord Mandelson: Of course, I accept that.

  Q171  Chairman: Can I ask two or three final questions. Firstly, the possibility of looking at the whole supply chain rather than just the tier one organisations. The kind of R&D support we are talking about with Jaguar Land Rover might also be appropriate further down the supply chain because losing major suppliers, of course, decimates the ability of a manufacturer to manufacture in this country.

  Lord Mandelson: Okay, but how far do you want Government intervention, bailing out and subsidy to go?

  Q172  Chairman: I think the industry's view needs to be listened to very carefully on that point to make sure they sustain their supply chains.

  Lord Mandelson: Do you think it would enjoy all-party support if we were to do so?

  Q173  Chairman: Pass, I am asking as a neutral chairman, I do not know! I will happily speculate about that with you privately, Secretary of State. What about what the French are doing, a scrapage allowance for older and more polluting vehicles, for example. The French are doing that on 10 year old vehicles.

  Lord Mandelson: A possibility, slightly overrated, tends to favour imports.

  Q174  Chairman: One last question from me. The industry came to see you in November. I have been told by some members of the industry that they have had no formal response to that meeting yet, they sense they have not had a closure on that meeting yet. You told us they are having another meeting later this month.

  Lord Mandelson: Yes.

  Q175  Chairman: That is when they will get the formal response of that meeting in November?

  Lord Mandelson: We have a continuing dialogue with them. We are not some sort of command and control organisation that receives the demands of the car industry one day and presents our conclusions the next.

  Q176  Chairman: It is nice to know where people stand in the fast moving and very difficult environment.

  Lord Mandelson: There are many sectors, many companies in parts of the economy who are worried and nervous and we have to think of them all, but I fully accept, as I said at the outset, this sector is very important for Britain's future manufacturing strength and our economic success.

  Q177  Chairman: If you were to ask for my view, my view is the importance of the R&D issues we talked about earlier because keeping those kinds of jobs going and supporting those kinds of jobs is much better than losing them because you will never rebuild that expertise.

  Lord Mandelson: If it were a choice between prioritising the finance arms or help with R&D, where would you put your money?

  Q178  Chairman: These are difficult decisions.

  Lord Mandelson: It is a rhetorical question.

  Q179  Chairman: Secretary of State, that concludes our questions.

  Lord Mandelson: It has been a great pleasure.

  Chairman: Thank you very much, indeed. We will see you again shortly.

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