Dáil Éireann díospóireacht -
Tuesday, 23 Apr 1968

Vol. 234 No. 1

Committee on Finance. - Motor Vehicles (Registration of Importers) Bill, 1967: Second Stage.

Minister for Industry and Commerce (Mr. Colley)

I move that the Bill be now read a Second Time.

It is required in order that full effect can be given to arrangements made with the British vehicle manufacturers and assemblers and with assemblers of non-British vehicles.

Immediately after the conclusion of the Anglo-Irish Free Trade Area Agreement, discussions were taken with British motor manufacturers and their Irish assemblers, with the co-operation of the British authorities. The basis of the arrangements now agreed upon is simple. The manufacturers and assemblers of British vehicles have given me satisfactory assurances of their intention to support the continued assembly of their motor vehicles in Ireland on a long-term basis, and, in return, the Government agreed to extend immediately to these manufacturers the duty reductions on fully built-up vehicles which would not otherwise fully mature until 1975. This means that these vehicles will be admitted free of protective duty.

These assurances provide for maintenance of assembly at the general level achieved immediately prior to the conclusion of the Free Trade Area Agreement, when assembly operations were at a high level generally, and there is also an expression of intent to expand such assembly operations, in so far as this may be consistent with the economics of the operations and the development of the market. In connection with these assurances regard must, of course, be had to fluctuations in market demand which might affect the industry as a whole or the position of particular firms within the industry.

As I indicated in the public announcement, in regard to the arrangements, at the end of November, I have offered comparable concessions to assemblers of non-British vehicles subject to satisfactory assurances given by the manufacturers and assemblers of these vehicles. I am happy to say that satisfactory assurances have been received from the firms concerned and I have been able to extend the benefits of the arrangements to these firms also.

The main provision of the Bill is one for the channelling of imports of fully built-up motor vehicles through registered firms—principally the existing assemblers who have given me the assurances to which I have referred. This provision for improved channels of trade is necessary to ensure that, as the duties on British vehicles are reduced under the Free Trade Agreement, the arrangements will not be undermined by the importation of vehicles by persons who are not parties to the agreed arrangements.

The Bill applies to the principal classes of motor vehicles other than agricultural tractors, large buses and some other vehicles which were not subject to the former quota arrangements. It does not apply to such vehicles as scooters and motor cycles. It covers second-hand vehicles because, otherwise, evasion of the scheme would be possible. Provision is made to enable the definition of motor vehicle to be amended by Ministerial regulations so as to take account of future technical developments and also to permit adjustment of the definition in the light of any difficulties or anomalies that may become evident in the practical application of the measure.

As I have said, all assembly firms which comply with the arrangements will be eligible for registration as importers of fully built-up motor vehicles of the makes and marques which they now handle. A firm may be removed from the register only where it is in breach of an assurance or undertaking given in connection with the arrangements or, by agreement, where a firm merges with another or goes out of business. In the case of assemblers of British vehicles, the only requirement for registration is the assurances they have given to maintain the level of their assembly operations, and all firms concerned have already furnished me with the kind of information which I consider necessary to enable me, if the need arises, to judge whether a firm is complying with its assurance in this regard.

Assemblers of non-British vehicles, who give assurances to maintain, at least, their basic level of assembly, will also be registered. Subject only to a Free Trade Area duty preference for British-built private cars, they will be allowed to do as well in all respects, in the aggregate, as assemblers of British vehicles.

The Bill does not affect the importation of c.k.d. aggregates and there will be nothing to prevent anyone from starting up in the motor assembly business. There is provision to enable such new entrants to qualify for registration as importers of fully built-up vehicles, subject to their achieving a satisfactory volume of assembly.

Although the main purpose of the Bill is to channel imports through the assembly firms, there is provision in the Bill to cover, in certain circumstances, the importation of fully built-up vehicles by firms which are not in the assembly business. One example is British cars of over £1,300 in value c.i.f. which, in the past, were not subject to quota and are imported by certain firms who are not engaged in assembly. These imports will be permitted to continue. After the quota arrangements had been abolished and up to the time the new scheme was announced, a few firms, which are not in the assembly business, imported small numbers of non-British vehicles in fully built-up condition. They will be enabled to continue on that scale. The duty concessions will not, of course, apply since they are available only to registered importers who assemble. Fully built-up imports, mainly by private individuals, will also be allowed on change of residence, tourist or other temporary importation and in other similar circumstances.

I should like to place on record my personal appreciation, and also the appreciation of my colleagues in the Government, of the willing co-operation which the manufacturers and assemblers displayed at all stages of the negotiations and which will, I am sure, continue in the future. We are also appreciative of the assistance and co-operation afforded by the British authorities.

The new arrangements have been welcomed by the industry and I am confident that all concerned will actively co-operate in seeing that they work out satisfactorily. In conducting the negotiations and in making the duty adjustments, the Government have done everything in their power to secure the survival of the Irish motor assembly industry, at its present level at least, for a long period ahead. How successful these efforts may prove in the future will depend to an increasing extent on the attitudes, not only of the management in the assembly industry, but also of the workers. Everybody concerned in the industry must endeavour to secure the highest possible level of efficient and economic operation in the assembly of motor vehicles.

Mr. Donegan

With your permission, Sir, before I proceed with my contribution on the Bill, I should like to ask the Minister what is the position as we move towards the Common Market and reduce our tariffs? In our present international situation, we can agree with what is in this Bill, but if we enter the Common Market, are the extensions of licences for importing and the restricting of the import of certain categories of vehicles to certain firms possible under Common Market arrangements, because it would appear to me that they would not be? This is a salient point which, I am sure without any desire on his part, is omitted from the Minister's speech.

Mr. Colley

It is true that on a strict interpretation of the regulations of the EEC, this scheme would not be possible. It is also true that on a strict interpretation of the Free Trade Area Agreement, it would not be possible. But we did succeed in negotiating it with the parties concerned, including, of course, the British Government. Naturally, I cannot say at this stage what the effect would be on our negotiation with the EEC but I would say that having the scheme in operation before we commence negotiations puts us in a stronger position than we would be in trying to get them to agree to it if it were not in operation, if the Deputy understands what I mean.

Mr. Donegan

I thank the Minister, and I thank the Ceann Comhairle for allowing me to ask that question. It was in this House that Deputy Lemass, when Taoiseach, was asked what would be the position of the motor assembly industry here in the event of free trade. It was Deputy Dillon who asked the question. The reply at the time was not very encouraging to those engaged in the business. It was a factual question and a factual answer from two men who were not used to gilding lilies. An arrangement was necessary and it was absolutely essential for the Minister now in charge of the Department of Industry and Commerce to consider this matter seriously and to try to make whatever arrangement was possible.

Motor cars are not manufactured at every crossroads. If one takes a few of the assembly firms in Britain and a few of the main Continental firms one gets an idea of the total impact on the employment and production that we in this country enjoy. There was a very small club with which we could negotiate. That the Minister has succeeded in negotiating is a very good thing. It is a very good thing that we are now in the position that those people who have the power to say so have given expression of intent — I quote from the Minister's speech—to expand their work here and, at least, keep it at the present level of production.

When I asked the question, I knew, but wanted to be clear because the Minister had not adverted to it, that this sort of agreement would be directly contrary to the precepts of the Treaty of Rome. The Minister is quite right when he says in reply to me that it is also contrary to the precepts and spirit of the Anglo-Irish Free Trade Area Agreement. At the same time, the fact that we have hope now where hope did not exist before—if we are to believe the answer given across the floor of the House to Deputy Dillon by Deputy Seán Lemass when he was Taoiseach—is an improvement.

There are things about it that must be adverted to, one of which is that the sale of motor vehicles here now is restricted, again, to this small club and we know that when there was a purchase tax in Britain on motor vehicles, at times amounting to as much as 17½ per cent and there was no purchase tax, turnover tax or special wholesale tax in operation here, the cost of a car here was as high as the cost of a similar car in Britain. Taking into account the cost of the transport of the completely knocked down vehicle and the fact that the assembly lines in Britain, where there is greater population and greater demand, would be more efficient than the assembly lines here, it did seem strange to ordinary purchasers of cars that over so many years the cost here was as high as the cost in Britain.

While expressing every hope and desire that the workers should continue to be employed and the industry should continue to prosper, I must say that we are now in the position that a very small club will have complete control of the importation of vehicles to this country and that it will not be possible for the outsider, even by paying a tariff, to import. This is made quite clear by the Minister, who refers to this as the main part of the Bill. This means that these people will be all-powerful.

While adverting to that, I want to say that it is a good step forward but, from the answer to the question which I asked in opening my speech, as to whether this could be continued in Common Market conditions, it is obvious that it is not a permanent situation, that the industry is not something that can be regarded as a blossoming industry that will continue for the next 25 years. It is a stop-gap situation. That does not mean that the Minister should not stop gaps or that I am being critical of him. When I say it is stop-gap, I am not critical. Anyone in the same position as he is in would stop the gap too and I would even go so far as to say that the Minister made a good job of stopping the gap. At the same time, this is not a permanent arrangement for the industry. It appears to me that in regard to the exportation of motor vehicles the only permanency that there could have been and which might have blossomed from the arrangement made by the Minister is the rationalisation of the motor assembly business.

There are many thousands of cars assembled in Britain for large combines and exported to contacts overseas. There is no reason why, if an assembly line in Dublin is as efficient as an assembly line in Birmingham or anywhere else, the same model car could not be assembled here and exported. There are many countries which have as yet no motor assembly business. Many thousands of cars are exported from Britain. If we could have got the all-powerful British combines to arrange that a portion of their export orders could be met from here then we would have been in the position that we could look forward to permanency for the industry whereas all we have succeeded in doing is producing a stop-gap solution which means that men will continue to work. This is of the utmost importance and I want to emphasise again I am not criticising the Minister for going to the fair and getting a price which may not look so good when one comes home. I am merely saying that it would be far better if we could get our assembly industry linked with the British assembly industry so that there would be permanence.

One of the flaws I see in the Bill and in the arrangements made by the Minister is that there does not seem to be any attention given to the question of whether or not too much will be charged for a vehicle here. I have already referred to the fact that prices were charged here for cars equal to the prices in Britain where there was a tax of 17½ per cent while there was no such tax in operation here. That has been the object of suspicion on the part of the consumers in this country over many decades, certainly over the past two decades. Here we have handed the consumer over to the assembler. We must keep the men employed. This is the right line to take. At the same time, I would have liked to have seen in this Bill some arrangement whereby the Minister would have access to the cost of vehicles assembled here and the price that would be charged for them and, also, some arrangement whereby the vehicles that might be imported here by assembling firms ready to be driven from the docks, would not carry exorbitant profits and fair control over an industry that is surely now living in an artificial climate. The only thing I feel is wrong about the situation is that the climate should be so artificial, that there is no arrangement for meeting the free trade challenge in the future and that it could be merely a temporary solution. I do not criticise the Minister for it but I hope that what is now being produced to us as a temporary solution could become over the next few years a permanent solution by a rationalisation and a blending into the British export assembly industry and that the Minister will make every effort to see that over the decades rather than the years the men employed would remain so employed.

Mr. Larkin

The House is interested in the assurances the Minister has been able to obtain that in cases where permission for the importation of fully assembled cars has been given the British assembly firms engaged will maintain the level of assembly that previously existed. I do not know to what extent these assurances are completely valid. The demand for motor cars is increasing substantially but, if there is a recession, there follows automatically a recession in the demand for motor cars. In such circumstances the type of assurance given to the Minister may well be qualified by the trade conditions at a particular time. While in the process of obtaining a further commitment from the bodies concerned, damage may already have been done to the assembly industry by loss of employment. The Minister is aware that as a result of a so-called process of rationalisation in the last year or so—whether it is properly called that or not I do not know— many workers employed for many years in a particular concern found that overnight their employment was no longer available and they were taken over by another larger concern and the difficulties of such a change on employment conditions and so on were thrust upon those workers.

It has been a matter of comment and may be a direct reflection on the firms engaging in the assembly industry here, that cars assembled in Dublin and Cork are costlier to purchase than cars assembled and sent in here even after the payment of duty. There is no doubt whatever that the skill of the workers in the assembly industry here is equal to that of the workers in the assembly industry in Britain. There may well be either a lack of ability on the part of those who control the assembly firms or a desire by them to earn profits out of proportion to their industrial operations. It is hard to understand the excess prices being demanded for Irish assembled cars. When the Minister has had these consultations he might investigate whether management efficiency in these firms is all that is desired and whether management are endeavouring to obtain this proportionate profit from a relatively smaller production.

I note that the Minister says the new arrangement has been welcomed by the industry and that he is confident that all concerned will actively co-operate in seeing that it works satisfactorily. The Minister indicated his concern for the workers. Could he indicate when replying whether his Department had any consultations with the representatives of the workers in this industry? It may well be that he had but it is not clear from his speech whether the workers' representatives were actually consulted and their opinions obtained.

There is another aspect of the matter which could well have more detailed examination by the Minister. The British assembly industry is a very large industry, but a high percentage of the components that make up a motor car are not directly manufactured by firms engaged in motor car assembly. I suppose if one were to sit down and start to make a list of the multifarious parts going to make up a motor-car it would be a very imposing list indeed of the parts supplied by component manufacturing firms. Has there been any attempt to encourage the development in this country of component manufacturing firms? I could well understand in regard to body pressings, the manufacture of the main chassis and engine parts, that the tooling up process is a very large undertaking, indeed, requiring major capital investment, large-scale plant and possibly very large manpower. But once you depart from the main component there are many components made in Britain by relatively small specialist firms employing relatively small numbers of workers. Has the Department made any investigation into the establishment of such specialist firms in this country? Not only could they supply the components for motor-car assembly in Ireland but possibly they might be able to engage in the export of components. Consequently they would serve the dual purpose of helping to maintain assembly here and at the same time providing work for skilled operatives engaged in the manufacture of components not normally made by assembly firms.

Like Deputy Donegan, I feel what is before us may prove in the long term to be only a stop-gap, unless further efforts are made to think in terms of manufacture apart from pure assembly and in terms of the manufacture of as many components of motor cars as possible.

The body shells of motor cars are becoming increasingly almost a repetition of one another. If the name were taken off the body shells in many cases, it would be found difficult to distinguish one from another. Again in the engine blocks, there is very little dissimilarity. Many of the component parts which go to make up modern motor cars are interchangeable. That can be seeen in the British Motor Car Corporation and the American-supported companies like Opel and Vauxhall. They have about 15 or 20 different types of cars using interchangeable clutches or something else. With the exercise of some study and some investment of capital in engineering technical know-how, it should be possible to have development in this field.

Those are some of the remarks I wanted to make. I appreciate the Minister's expression of concern for the maintenance of a level of employment for the workers in this industry. I should like to query whether in fact the assurance both from the British firms and the other continental firms who do not assemble in this country are not assurances that could easily be avoided at particular times. I should like him to indicate to the House whether he and his Department had consultations with representatives, and the nature and extent of such consultations. He has indicated his concern about workers in the assembly industry. We on these benches are interested in the effect on the consumers, those who wish to buy motor cars, and whether they are being required to pay too much because of a profit-making concern getting a larger slice than they are entitled to.

At the same time, we are deeply concerned with the question of the maintenance of employment of workers in Dublin, Cork or any part of the country, and the maintenance of their employment in this industry not just for a period of six or 12 months or two years but for a much longer term. If we do not demonstrate that we care sufficiently about the maintenance of the employment of the workers in any industry, the best of the workers will find somewhere to go and their talents, skill and ability and their contribution to our economy will be lost to the country for a long time.

Mr. P. Byrne

I share the apprehension expressed by the two previous speakers in regard to this Bill. The Minister, Deputy Larkin and I have a common interest in the future of the motor assembly industry because it is very significant that in our constituency there is employed a good percentage of those who work in the assembly trade and they are earning very good money at present. As Deputy Larkin says, there were certain upheavals in the industry in the past year and all involved are very concerned about the future of the industry.

The Minister could have been far more informative in regard to the nature of the assurances he has obtained from the motor assemblers. Personally I am sceptical. I seem to recall, speaking purely from recollection, that the CIO had some fairly harsh criticisms to make of the motor assemblers in this country. A very significant fact which we have to face up to is that the motor assemblers who have certain contractural arrangements with their British principals and are tied up with the parent companies are likely to make far more profit out of importing cars to this country and distributing them here than through the process of manufacture in this country. That fact was brought out by the CIO who went on to say that the assmblers were far from forthcoming in producing plans for the diversification of the industry.

It behoves the Minister to tell us far more than he has done about the nature of the assurances for safeguarding the employment of my constituents and his. I personally apprehend that while they are tooled up for their present models they will continue to produce them because a retooling up process is very expensive and involves a substantial capital investment. I would feel much happier about this measure if the Minister would inform us far more fully than he has done of the nature of these assurances and as to their future intentions with regard to the safeguarding of the employment of the skilled workers in the trade. Unfortunately not all of these tradesmen, in the old fashioned sense of the term, are in a position to obtain employment in other industries. I am worried about their future and I should like to hear from the Minister about the assurances he has obtained.

Mr. Colley

Perhaps the first point I should make is that it is misleading to suggest that this is a stop-gap scheme or that it is designed to last for nine months, which I think was mentioned, or a few years. In actual fact, the term contemplated and made clear in the negotiations was 25 years and the only qualification was the matter raised by Deputy Donegan, that is, our possible entry into the EEC. As I have said, it is not possible for me at this stage to say what the outcome of our negotiations in regard to entry into the EEC will be in so far as this concerns the motor assembly industry. Obviously I cannot give any concrete assurance in that regard, but nevertheless it would be unrealistic not to recognise the fact, as I pointed out, that this scheme, on a strict interpretation of the Free Trade Area Agreement, is contrary to it. Nevertheless, the scheme has evolved and been agreed to as a result of negotiations.

Secondly, as far as the Commission of EEC is concerned, it has demonstrated on a number of occasions in its operations that, while it is anxious to secure equal application of the rules of the Community within the Community, it has regard to special difficulties arising in the economy of any particular member and is prepared to make special arrangements where specific difficulties arise. While I cannot enter into any commitment in advance of such negotiations, I think I can say it would be unduly pessimistic to visualise that this arrangement could not carry on when we are within EEC. There might possibly be some modifications of the scheme. I would hope and believe they would be minor and that the substance of the scheme would be carried into the Community.

The term contemplated in this regard is 25 years. I want to lay some considerable stress on that lest any of the speeches here today should unintentionally—I have no doubt it would be unintentional—create undue disquiet among the workers concerned in this industry.

One of the reasons there has been difficulty in this industry in recent years is this very lack of certainty and the knowledge of the facts of the situation as set out in the CIO Report. In the light of this agreement, I believe all concerned in this industry can now go ahead in the confident assurance that this scheme will operate for a very long time provided everybody concerned is prepared to implement it. We have no reason to believe that everybody concerned is not prepared to implement it.

Deputy Byrne referred to something that I think is a fact, certainly in relation to some of the assemblers, namely, that it would be more profitable for some of them to stop assembly and simply to import fully built-up vehicles. The fact that, despite that, they have agreed to this scheme is I think evidence that they are concerned with more than their rate of profit.

Furthermore, in regard to some things said by Deputy Larkin, I think I ought to reiterate that the whole point of these negotiations—they were lengthy and at times tedious—the whole point of making this arrangement and of bringing this Bill before the House, is to secure the employment of the workers in the industry.

Mr. Larkin

Negotiations in Britain or Detroit?

Mr. Colley

I am coming to the point raised by Deputy Larkin. I do not want any misunderstanding about this. I do not know if Deputy Larkin meant to imply this in what he said but it could be taken from what he said that there was some doubt as to Government concern about the employment of workers in this industry. I do not think any reasonable person could have any doubt about this fact because, if the Government had not been so concerned, these negotiations would not have taken place and this Bill would not be before this House today.

Deputy Larkin asked whether or not there were negotiations or consultations with the workers' representatives, the trade unions. The answer, which I gave in the House some time ago, in answer to a question, is "No": there were not. The trade union representatives were informed of the scheme but they were not consulted for the simple reason that they could not, no matter how much goodwill they had towards the objective—obviously they would be concerned with the objective to retain the employment of the workers —ensure the carrying-out or the entering into of this arrangement. The people who could make or break this arrangement were the British manufacturers, the assemblers here, our Government and the British Government. Without them, this agreement could not be made.

The trade union representatives were informed of the arrangements before they were made public, which was as far as we could go. I think there were some interim talks with them but no consultations in the sense, I think, Deputy Larkin meant.

Mr. Larkin

The Minister does not know what sense I meant it in.

Mr. Colley

In the sense I think the Deputy meant it. I have referred to the question of some assemblers, at least, being in the position where they could make greater profits by dropping assembly. That brings me to the feeling of many people that the price of cars assembled here in the past should have been lower having regard to the fact that similar cars were selling in Britain at lower prices even when subject to purchase tax. I have not the figures at the moment but there are two factors which should be borne in mind in all fairness to our assemblers, both management and workers.

Criticisms I have heard in this regard have not been directed solely at the management on the ground of making too much profit, I have also heard allgations that the workers concerned were not doing their job. I do not think either of these allegations was justified. There are two points which must be borne in mind. The first point is that CKD aggregates, completely knocked-down parts, brought in for assembly were subject to a fiscal duty of 20 per cent. Since November last, that has been reduced to 17½ per cent. This was a cost built-in that neither the management nor the workers could do anything about.

Secondly, it may seem, on the face of it, that if you get all the parts of a car, unassembled, and assemble them, the difference between what you pay for the parts unassembled and the cost of the completed car should be the cost of the wages and skill put into the work. That is not so. The cost of CKD aggregates, relatively, is very much higher. I am told that manufacturers of motor cars on a large scale have a very complicated assembly line, bringing all the components together from different areas. They work along an assembly line. It is cheaper for them, in some cases, to complete a car and take it asunder than to take portions out to put into a CKD pack. This may be an extreme case. I do not guarantee it happens in all cases. However, in most countries where the industry is an assembly industry, as distinct from a manufacturing industry, this has been a big bone of contention—the amount charged by the manufacturers for the CKD parts and the reason given by the manufacturers is that it costs them a great deal of money to stop the production line and take out certain parts where you have different operations in different countries, some countries assembling at one level and some at another. These are two major factors in the costs which should be borne in mind before one enters into criticism of the assemblers, management and workers, as to the cost——

Mr. Larkin

Nobody is criticising the workers. We are not criticising them.

Mr. Colley

There has been criticism and the Deputy should not close his eyes to it.

Mr. Larkin

Repeatedly from Government benches—and this includes the Taoiseach—there has been criticism of faulty workmanship and of many other things in manufacture and these criticisms have been properly laid where they belong, on the people in charge of the industry.

Mr. Colley

The Deputy might recall what I said, that there had been criticism—I did not say that I am making criticism—both of the employers and the workers in this industry and I was pointing out that these two major factors should be taken into account in any assessment of the performance of this industry in the past. The point was made by Deputy Larkin—or at least he inquired—as to whether efforts had been made to develop a components industry, an industry for the manufacture of components as distinct from assembling. Some efforts have been made but, perhaps, I should add that at the moment springs, tyres, batteries, sparking plugs, glass, unholstery and paints are all produced here for cars assembled in this country. Some of the industries providing these components at present may face difficulties because they are operating here on a relatively small market, that is unless they can secure orders from manufacturers outside the country. The difficulties for them in doing this are, first, that unless they are producing something in which some kind of specialist skill is brought to bear, it is unlikely that they can produce very much cheaper than a competitor firm in another country. Then, the fact that they are producing here means that the goods would have to be shipped to a manufacturer in another country and that adds to the costs. This means they are working under considerable difficulty.

On the other hand, I recently had the privilege of opening a new factory at Naas, a factory making mirrors for motor cars. It is a subsidiary of an American company but they are geared for the export market. They have been supplying cars assembled here from abroad, but they are now going to supply for the export market largely because they have a specialist quality in producing these mirrors which may seem fairly simple but are not. Apparently, there have been technological developments in regard to mirrors for cars in making them meet safety regulations which mean that this firm which was opened recently should, I think, do very well on the export market. Unless a firm has this particular kind of expertise its chances of doing much business outside the country in the manufacture of components for motor cars are not very good.

I do not say we should leave the matter there. Manufacturers of components will, of course, be enabled to continue to supply the cars which are being assembled here and which would not be assembled if we did not have this scheme, but these cars will be forming a smaller proportion of a growing home market than in the past. This means that some of these manufacturers may have an opportunity with the home market still in existence, which they would not otherwise have, of developing on the basis of the home market into foreign markets but to do so they would need to have some specialist quality.

I think Deputy Larkin raised the question of what was the value of the assurance we have received. I think Deputy Byrne also raised it. Deputy Larkin said that he wondered what all these assurances would be worth in a time of recession. I can only say that, as of now, most, if not all, firms in the assembling industry are working virtually to full capacity, many of them certainly at full capacity including the maximum overtime they can work. As our market grows—and it will grow— there will be more fully built-up vehicles brought in even though they are working to full capacity here. In the event of recession, the first thing to be hit will be the import of fully built-up vehicles because a firm which continues importing them and cuts down on assembly will run the risk of having its right to import fully built-up vehicles withdrawn, in other words, their registration under this scheme. Any firm which is foolish enough to take that chance will deserve to have that happen to it but I do not think any firm would be so foolish. The assurances we have in writing from all parties concerned, manufacturers and assemblers, are, I believe, as strong as they can be having regard to all the possible variables in the circumstances. What they amount to is that they undertake in return for the concessions which the Government are making to maintain their assembly operations on at least the level at which they operated in 1965. I do not know what further assurances I can get or what more binding ones. I believe the assurances we have got are as good as anybody could reasonably expect. There are, of course, built-in sanctions in this scheme.

But there is more to it than that. I am also satisfied that the people involved in this industry, all the parties to the agreement, have operated on the basis of making this arrangement work and that this has been the objective of everybody concerned. I do not believe that we shall find that people will want to cut down below the 1965 level. If they want to do so, we have the built-in sanctions but I do not think that is going to arise because everybody concerned wants this scheme to work. I believe it can work and that it will work and that the effect of this working will be that all workers in the assembly industry whose jobs were in jeopardy are not now in jeopardy; that they can have a reasonable assurance of long-term security in this industry. I want to make it clear that there is no qualification on that other than the one I mentioned about the EEC and I regard that as being a relatively minor qualification. Subject to that, workers in the assembly industry may now take it that their future is secure for the rest of their lives at any rate.

Question put and agreed to.