THE Trade and Industry committee investigating UK new car prices has called for jail sentences for heads of car firms if they are proved to be acting in a monopolistic fashion. Publishing its report, Vehicle Pricing, the committee said: 'If there is found to have been grossly anti-competitive behaviour, despite a series of denials from dealers and manufacturers, it is our view that due consideration will have to be given as to whether criminal penalties should be available as a deterrent to such behaviour in future, and a mark of public anger.'

It urged the Office of Fair Trading to take the toughest possible line in dealing with cases where manufacturers blocked UK car buyers' attempts to buy cars overseas, and to pursue such cases with the European Commission. Prime Minister Tony Blair backed the calls, and said: 'Under the new Competition Act 1998 there will be financial penalties of up to 10% of UK turnover for firms that infringe the prohibitions. I am confident that those new powers will be effective.'

Parallel imports have only arisen because new car prices on the continent are substantially lower than UK prices, leading the AA to call on manufacturers to make it clear they were operating in favour of the British consumer, rather than on the principle of what each national market will bear. Matthew Joint, AA campaigns manager, said: 'It is now up to the Government to take action to ensure that British motorists start getting a better deal on new cars than they have had up to now.'