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Lord Whitty: My Lords, a concerted European stance at Kyoto and beyond gives us greater leverage in relation to developing countries and the United States in all these negotiations. The position within the United States has hitherto been disappointing. My right honourable friend the Deputy Prime Minister was there only last week and detected a bit of a shift in both corporate and political opinion, although I do not believe that there will be any serious move in the US until after certain elections take place later this year.

Rover and Ford: Prices and Sales

3.30 p.m.

Lord Mackay of Ardbrecknish asked Her Majesty's Government:

The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, in March 1999, the Director-General of Fair Trading referred the issue of new car prices to the Competition Commission for investigation. The Government's announcement on 10th April of their decision to implement the remedies recommended by the Competition Commission is intended to meet consumers' concerns about whether they are getting a fair deal and to remove any uncertainty in the market.

UK car sales were up by 3.9 per cent in the first quarter of this year compared with 1999. Ford's sales were up by around 6 per cent in the first quarter of this year compared with a year ago, while Rover's declined by a similar amount. However, other factors will have influenced Rover's position, including ageing models and the uncertainty over the company's future. The latest available figures for production for the UK are for 1999 and at 1.79 million are the highest since 1972.

Lord Mackay of Ardbrecknish: My Lords, I thank the Minister for that reply and congratulate him on coming here to answer the Question, taking some of the load off his noble friend Lord McIntosh of Haringey, who I see is bowling again today.

Is the Minister satisfied with that Answer? Is it not a simple fact that Rover sales were down by more than one quarter in 1999 and that half of the 50,000 Rover 75s already produced are standing in an enormous car park unsold? Is it not the case that the Government's "Rip-off Britain" campaign encouraged many people to delay buying cars and helped--it was not the sole

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factor--to bring about the problems now occurring in Rover and Ford? Do not the Government feel just a tiny bit responsible?

Lord Sainsbury of Turville: My Lords, the fact is that in 1999 UK sales were the fourth highest on record. That does not suggest that there was a collapse in the sale of cars in this country. It is strange for me to have to tell Members on the opposite Benches that in a competitive market there are winners and losers and that that is affected by their performance in the market.

We are talking about references to the Competition Commission on the recommendation of the Director-General of Fair Trading. I hope that the noble Lord is not suggesting that it is the role of government to veto such investigations. If he is suggesting that--and it is what he is implying--the campaign which he describes was initiated by the Director-General of Fair Trading in referring matters to the Competition Commission. Is the noble Lord suggesting that those should be vetoed? If he is, many people will be confirmed in their view that the Conservative Party is not interested in open, free and fair trading, but is interested in price fixing and the exploitation of monopoly positions.

Furthermore, we do not claim authorship of the expression "Rip-off Britain". I believe that it was invented by various newspapers to describe life under the previous administration.

Baroness Oppenheim-Barnes: My Lords, in favour of openness and fair trading, could the Minister tell the House why the cars imported into this country from very weak euro countries are not being sold a great deal more cheaply?

Lord Sainsbury of Turville: My Lords, the whole point of the report of the Competition Commission was that, despite the large number of imported cars, prices here were 10 to 12 per cent higher than those abroad. It rightly concluded that that could imply that there was not a fair, free and open market. That was the judgment of the Competition Commission and it ill behoves other people to query that and argue for price fixing.

Lord Jacobs: My Lords, is the Minister aware that if we had joined the euro at its commencement, British car manufacturers would have had no difficulty in greatly increasing their export sales?

Will he further agree that as Rover is able to sell its cars on the continent 30 per cent cheaper than in the UK it would greatly increase its sales in this country if it carried out a similar policy here?

Lord Sainsbury of Turville: My Lords, the impact of sterling makes life much more difficult for exporting companies. That goes without saying. However, other factors relate to the performance of Rover and its ability to compete in the market; for instance, dated models and the fact that its productivity is 31 cars per person compared with 106 per person at the Nissan car

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plant in Sunderland. That fact is clearly material to the case and relates to the underinvestment at the Longbridge site over many years.

Lord Tebbit: My Lords, the Minister referred to winners and losers among manufacturers in the British car industry. In the event that the Government decide to give financial aid to Rover, as they were intending, would they be putting taxpayers' money into a winner or a loser?

Lord Sainsbury of Turville: My Lords, the package was put together to help the situation and to protect jobs, as far as possible, using regional selective assistance. It was an attempt to ensure that we continued to have production on that site in a company which had not performed well but where it was possible to retrieve the situation.

Lord Clark of Kempston: My Lords, does the Minister agree that the future of the car industry will depend on investment? Do the Government have a view on the suggestion of a tie-up between Frankfurt and the London Stock Exchange? All most people see us getting out of it is the use of their computer.

Lord Sainsbury of Turville: My Lords, further investment in the British economy and in the car industry depends on many issues. The most important is the state of the British economy, which is why our macro-economic policies are so important. Within that, the issue of the Stock Exchange is important, but not nearly as important as the issue of macro-economic stability.

Earl Ferrers: My Lords, will the Minister pop his mind back to the question asked by my noble friend Lady Oppenheim-Barnes? Is it not a fact that when the pound is high exporting is difficult and imports are cheaper? That happens everywhere. Why is it, therefore, what when we have a high pound imported cars are not cheaper?

Lord Sainsbury of Turville: My Lords, I do not want to go into basic economics, but that is exactly what price fixing is about. Of course one would expect to see the price of imported cars falling when the pound is high. The fact that one does not is exactly why one should be deeply worried about the situation.


Lord Carter: My Lords, before dealing with the Private Notice Question tabled by the noble Lord the Leader of the Opposition, it may be for the convenience of the House if I remind your Lordships of the procedure to be followed for Private Notice Questions. Proceedings follow the rules for Starred Questions. The Companion states that supplementary questions should be short and confined to not more than two points. In addition, the Procedure

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Committee recently agreed that proceedings on a Private Notice Question are expected to take not more than 10 minutes.

House of Lords Appointments Commission

3.37 p.m.

Lord Strathclyde: My Lords, I beg leave to ask the Question of which I have given private notice; namely, to ask Her Majesty's Government whether they will announce the membership of the House of Lords Appointments Commission promised in the Government's paper, Modernising Government: Reforming the House of Lords.

Baroness Jay of Paddington: My Lords, this morning my right honourable friend the Prime Minister announced in a parliamentary Written Answer the decisions on the membership of the commission. My right honourable friend stated:

    "Following an open recruitment exercise conducted in accordance with the principles of the Commissioner for Public Appointments, I have decided to appoint the following people, on the recommendation of the selection panel, as the independent chairman and members of the interim House of Lords Appointments Commission.

    "The chairman will be Lord Stevenson of Coddenham, the chairman of the Pearson Group and Halifax plc and a Cross-Bench Peer in the House of Lords. The leaders of the Conservative and Liberal Democrat parties have been informed and are content for Lord Stevenson to be appointed as chairman.

    "The independent members, chosen from a strong field of candidates, will be Mrs. Angela Sarkis CBE, the chief executive of the Church Urban Fund; Dame Deirdre Hine, previously Chief Medical Officer at the Welsh Office and chairman of the Commission for Health Improvement; and Ms Felicity Huston, chairman of the Northern Ireland Consumer Committee for Electricity and deputy chairman of the General Consumer Council of Northern Ireland.

    "In addition, the commission will contain a member nominated by each of the three main political parties. The Labour Party member is the right honourable Baroness Dean of Thornton-le-Fylde. The Conservative Party member is the right honourable Lord Hurd of Westwell, CH, CBE. The Liberal Democrat member is Lord Dholakia, OBE, DL.

    "The seven members of the commission will combine knowledge of the existing House of Lords with a diverse range of personal backgrounds. They will be well qualified to take forward the process of appointing non-political Peers to the House of Lords on a more open and transparent basis and to take on the responsibility for vetting all nominations for peerages".

Biographical details of the members of the commission will be placed in the Library.

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