Motor Vehicle Distributors

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Mr. Page: I thank my hon. Friend for that unsolicited testimonial. I have nothing at all to do with that firm; it is other skilled people who do the work, not me. I might not look after the cars as well as they do.

On safety, it is not only a question of doing the job but of being able to trace vehicles before they can be recalled. A mechanism must be in place to do that. We all agree that the old block exemption system must be changed radically—it is an admirable notion—but it is only half the story. It is all complaint and no solution.

Mr. Chope: It is all complaint, certainly. The solution is expressed in the amendment: we should support non-renewal of the block exemption. Instead of being so vague about it, the Government now have the opportunity to come clean and say exactly what they want to see in its place. Time is running out. If people say that something else should be put in its place but cannot make precise recommendations, the special interests who now benefit from the block exemption arrangements—to the consumers' detriment—will say that as no one has come up with anything better we should continue with the present regime. However, everyone who has questioned the present regime—members of the Select Committee, the Competition Commission and now the European Commission—has concluded that it is unsustainable and acts against public interest in all respects. As an essential first step, the commitment to allow the block exemption in its present form to expire in September 2002 should be endorsed by the Committee, and I hope that my hon. Friend the Member for South-West Hertfordshire will support the amendment for that reason.

The amendment would not preclude the replacement of the regime with some alternative, but it would give a deadline. It says that we think that the existing block exemption cannot be renewed beyond September 2002, and that unless some hard thinking is done to replace it with something fresh, we shall be dissatisfied and will do our own thing. Someone said earlier that a car was the second most expensive purchase that people make. I always thought that the spouse and the house were the two most expensive purchases, and that the car came third. [Interruption.] I hear some intakes of breath. I did not refer to spouses of a particular sex, I hasten to add. I know that my wife made a substantial investment when she married me.

We take such issues seriously in this country, which has such consumer interest in motor vehicles. The Government have made much during this Parliament of how they are on the side of the consumer. Despite that, they have not been able to pass their consumer legislation. Whenever they are in a corner, they continue to accuse everyone except themselves of being rip-off merchants. They commissioned a useful report from the Competition Commission, and I only wish that the Minister would act with more vigour than he has today suggested that he is willing to, which is why I favour the amendment.

11.57 pm

Mr. Bob Laxton (Derby, North): It is one of the extremely rare occasions—it will probably remain so—on which the hon. Member for Christchurch (Mr. Chope) and I have common cause on a subject. I do not, however, have common cause with him on the general thrust of his contribution, especially its last section.

I shall be brief in drawing the Committee's attention to the amendment. The Select Committee on Trade and Industry reached a view—I believe that the Competition Commission reached the same one—that, as the amendment states:

    ``the `natural link' between sales and after-sales service seems no longer to exist''.

The Select Committee obtained a great deal of information from various quarters and organisations when undertaking the inquiry into motor vehicle pricing. The unanimous view of its members was that we saw no case for the block exemption regulations to continue beyond September 2002.

The Minister was asked whether he would be prepared to withdraw arbitrarily from the block exemption agreement. The amendment does not seek to secure that withdrawal, but would allow the exemption to wither on the vine. I want to reinforce a pertinent point raised by the hon. Member for Christchurch. In our discussions with the Commission on the subject perhaps only four or five weeks ago in Brussels, I detected a clear suggestion that the Commission was not floundering in deciding which way to go, but that it wanted a decisive lead in the consultations. It was not necessarily evasive in its response to our questions, but I sensed that it wanted a lead from the UK. This self-explanatory amendment provides a mechanism to show it a specific course of action. I hope that the Minister and the Committee will support it.

11.59 am

Miss Anne McIntosh (Vale of York): I congratulate my hon. Friend the Member for Christchurch on moving his amendment so eloquently, and the Minister on speaking rather briefly to the motion. I should like to declare at the outset my personal support for the car industry, both manufacturing and dealing. The industry makes a major contribution to the national economy and to local economies and employment. Whether or not we have a buoyant car market is frequently considered to be the weathervane of the UK economy.

My constituency is clearly missing out by not having a Page Motors.

The Chairman: Order. Enough of this sponsorship. Stick to the amendment.

Miss McIntosh: I am grateful for that guidance, Mr. O'Brien.

I should like to place on record the absence of Liberal Democrat Members from the Committee this morning. Perhaps they do not consider it necessary to recognise or support the motor industry's role in the British economy.

I will refer to exhibit F of the Competition Commission's report on new cars. The report deals with the supply of new motor cars in the UK. It makes several recommendations, and I would have thought the Minister and the Committee would have spent some time on them this morning. It concludes that substantial changes are necessary, and its conclusions are similar to those of the Select Committee on Trade and Industry.

The report recommends three alternative courses of action. The first option would be to allow the benefit of the block exemption to be unilaterally withdrawn in relation to individual agreements in the UK. The second option would be to prohibit acts permitted by the block exemption. Thirdly, the block exemption itself could be changed or allowed to expire. Those recommendations are clearly set out in point 1.20. on page 6 of exhibit F. Will the Minister give the Committee some indication as to what further action the Government propose to take, and on what time scale? He should bear in mind that the block exemption will be deemed to have expired, be in need of replacement or in some way have been brought to a conclusion by 2002.

The Consumers Association has remained robust throughout each review of the block exemptions, and this occasion is no exception. The association takes the view that the block exemption should be based primarily on what consumers want, and should ensure quality of service and remove the link between sales and servicing. The amendment so eloquently moved by my hon. Friend the Member for Christchurch, on behalf of the members of the Trade and Industry Committee, states:

    ``the ``natural link'' between sales and after-sales service seems no longer to exist''.

The amendment also strikes a chord when it goes on to note that

    ``car buyers still face difficulties when they try to purchase new vehicles in another member state''.

The Committee was able to pursue the matter directly in questioning, and I feel very strongly about it.

I was delighted to note the Minister's offer. I took it to mean that, if in the future a member of the public wishes personally to lodge a complaint with the Commission, the Government will consider supporting that claim. That would be a great development. In my experience, few people have had the chance that I have to work behind closed doors, to sit in on some of the Commission's meetings and to hear the evidence that it hears. Simply lodging a complaint can be an intimidating so that offer is welcome. There are still many barriers. It is not uncommon to have to wait for six months for a right-hand drive vehicle from Denmark or Belgium.

When we entered the common market in 1973, many people thought that it was for the cheap booze and cheaper cars. We seem to have lost out on both counts. One could be said to be the failure of successive Governments and the other a failure of the system, which has been shored up in a succession of block exemptions. I urge the Minister to look at imaginative ways of further opening up the market to parallel imports. We are talking about genuine competition. It does not pose a serious threat because, as the Minister said, we want both manufacturers and motor dealers to earn a living; no one would begrudge them that.

I am full of admiration for the motor dealers who operate within Vale of York, or who provide services to my constituents. They are operating in a highly competitive market. In this country, we have the highest on-costs and the strongest currency, and we probably have the most rigid regulatory framework, so they need all the help that they can get. However, I do not believe that they need to hide behind the protectionist system of the current block exemption.

I note that the dealers' margins have been reduced. The Minister referred to the introduction of a bonus scheme, which is very welcome. Dealers' margins average 10 per cent. My hon. Friend the Member for South-West Hertfordshire looks surprised and incredulous at that, but it is firmly documented and we have had no documentation to refute it, so I have no reason to doubt it. That is a very high margin, and if the dealers have any sense, they will put it back into their businesses.

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