Examination of Witness (Questions 40-52)
PROFESSOR RICHARD
PARRY-JONES
18 MAY 2009
Q40 Mr Binley: Yes.
Professor Parry-Jones: I cannot
see any alternative to the continued hollowing out of the industry
in the UK. It seems to me that without some significant government
help and collaboration with the industry—this includes the
industry collaborating with itself, with the government acting
as a broker to a certain extent—I do not think we will see
a significant change to the hollowing out process that has been
going on for the last 10 years. I think we will be increasingly
at risk from the growth—
Q41 Mr Binley: Are we not going to
see one of the Vauxhall plants going? Are we not going to see
Luton going anyway?
Professor Parry-Jones: I have
no idea. I do not have the inside story on Luton.
Q42 Mr Binley: I am concerned about
your faith in government bodies collaborating and what I see as
a rather quaint and attractive view of how government acts in
the best interests of its people. I do not quite see that. I see
a lot of in-fighting and departmental struggles. I see a lot of
silos and I see that in local government, let alone in national
government. Is it really practical to get the cross government
operation you want? For example, you want this to be led by BERR
but you want the Treasury involved and you want the Department
for Transport involved. BERR is a junior operation certainly next
to the Treasury. Do you really see that happening in the way you
want?
Professor Parry-Jones: I have
worked in a number of foreign countries where the auto industry
is quite strong and they seem to be able to pull it off.
Q43 Mr Binley: Tell me where.
Professor Parry-Jones: Germany
is an excellent example.
Q44 Mr Binley: The German character.
You might be right. I was talking about this country because that
is where you want this to happen.
Professor Parry-Jones: That is
true. I do not pretend to have all the answers about how you overcome
some of the practical difficulties of making this operational.
If we benchmark international competitors, we may have to have
a unique method of doing it in the UK because of our cultural
and constitutional history, but it seems to me that the outcome
again has to be more competitive than our major competitors who
are, by the way, winning this war at the moment. They are winning
the game. If we want to reverse that, we have to think of a way
of collaborating better than we are today across departments and
between government and the industry.
Q45 Mr Binley: Are they not winning
the game because they are bigger and have had more money for the
last 25 years?
Professor Parry-Jones: The international
competitors?
Chairman: They make very good cars as
well.
Q46 Mr Binley: Because they are bigger
and have more money.
Professor Parry-Jones: There are
some things that we cannot easily reverse or change. A very significant
factor in their success has been the unwavering and very strong
support the host country has given to those industries. In discussions
I have had with politicians, I think they underestimate the influence
they have over international investment decisions.
Q47 Mr Binley: My final question
is about what the report states as a criticism of the present
complex, arbitrary and often punitive fiscal regime for vehicle
ownership and use. Do you not see that regime worsening from an
industry perspective rather than getting better?
Professor Parry-Jones: I admit
to not being of the extremely sceptical persuasion that there
is no point in making recommendations about this stuff because
they will never be adopted anyway. We have gathered the evidence,
analysed it, used our experience and our knowledge to produce
recommendations that are our best shot at what we think should
happen. I have not encouraged the group to dilute their recommendations
on the basis of, "Oh, that will never happen. Nobody will
ever do that." I have rather reached out for what should
we do if we want this industry to be competitive.
Q48 Mr Binley: Professor, you made
that statement in your report. Let me rephrase my question. Instead
of looking at the rather negative way I put my question, what
would you like to see in terms of that statement, "the present
complex, arbitrary and often punitive fiscal regime for vehicle
ownership and use"?
Professor Parry-Jones: I believe
that in order to make progress on an equitable basis towards a
low carbon personal transportation system—and as we said
in the report personal transport accounts for 90% of all passenger
kilometres, so it is going to be around for a heck of a long time—what
we need to do is, instead of having bands that are changed every
few years, different bands in London as was one of the proposals,
municipal authorities having the power to impose congestion charging
based on anything they want, we should have a harmonised regime,
first of all, so that everybody is using the same rules for fiscal
incentives and disincentives. Within that framework, every gram
of carbon emitted per kilometre should be treated to the same
penalty, irrespective of the technology used to release it, irrespective
of the fuel used, irrespective of the purpose the journey was
put to and irrespective of the type of vehicle used to get there.
Every gram of carbon has exactly the same impact on the planet.
Mr Binley: Are you frightened about an
over-mighty government?
Q49 Chairman: I think what you are
frightened of is an arbitrary government, if I am right.
Professor Parry-Jones: There is
an opportunity to work constructively with government. We need
to be very careful. You are quite right about that. There are
plenty of failure modes that could be incurred along the journey,
either government getting too powerful or none of the recommendations
being taken seriously and put into action. I understand all that
but I think we have nevertheless a duty to put forward what we
think are the right recommendations.
Chairman: The technology neutrality of
what you are saying is really important. The former Mayor of London
had a preference for hybrid cars but cars which emitted less carbon
paid a higher rate and there was a certain inconsistency. I think
that is the point. I think sensible rather than over-mighty government.
Q50 Lembit Öpik: I am tempted
to raise the segway as a personal transporter, but the one question
I had was do you think there is any way that the government can
drive the survival of the supply chain, which obviously employs
hundreds of thousands of people, or is that too big a challenge?
Is it unfeasible to do that?
Professor Parry-Jones: No. As
you phrased it with "drive", I think that is too tall
an order. Can they help? Can they facilitate? Can they mitigate?
Can they tip the balance with all the other efforts that are going
on? I think their role is very decisive and very influential.
We should be encouraging the government to do everything they
can within reason to make sure the supply base does not continue
to be hollowed out.
Q51 Lembit Öpik: If you could
give a 30 second piece of guidance to government on how to do
that, what would that guidance be?
Professor Parry-Jones: Implement
the recommendations of our report.
Q52 Chairman: When I was working
as a special adviser at the DTI in the 1980s, we had a policy
of tracking of every international, mobile investment to the UK.
We had Honda, Toyota and Nissan all coming to the UK setting up
plants. That was the industrial policy at the time. We used our
influence very strongly to get that. It was government to government
stuff. Are there specific examples in recent history when government
has underestimated its influence in this area?
Professor Parry-Jones: Maybe not
specific examples. The evidence that we have collected suggests
that this is a more pervasive problem. It is more a problem of
perception, by repetitive actions or inactions. More recently
I think the issue has been one of inaction rather than lack of
response to specific opportunities.
Chairman: Professor, this has been an
extremely valuable session. I am enormously grateful to you. Your
journey down here today has been difficult to organise but I can
honestly say it has been pure gold as far as we are concerned.
It has set a fantastic and really helpful context and helped us
understand your report. When I read it again properly, I will
now know what you meant even more clearly than the excellent wording
in the report when I read it in the first place. This has been
absolutely invaluable and we are very grateful to you.
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