§ 3. Mr. McCrindleasked the Secretary of State for Trade and Industry if he has yet been approached by British Aerospace for financial assistance in the development of the proposed new Airbus project known as A330 and A340.
§ Mr. ChannonThere have been preliminary discussions between my Department and British Aerospace about the proposed new Airbus programmes. Though British Aerospace has indicated that it would expect in due course to apply for Government launch aid in respect of these programmes, no formal application has yet been received.
§ Mr. McCrindleIf we are to sustain a viable aircraft manufacturing capacity in Britain, is there not a strong argument in favour of responding favourably to such an approach from British Aerospace should it be forthcoming, not least because Germany appears all too eager to take the place of Britain in the Airbus project? As we have already invested a substantial sum in the A320, should we not offer to British and international airlines an opportunity to buy an Airbus product straight across the board, as they can at the moment from Boeing and McDonnell Douglas?
§ Mr. ChannonI have not closed my mind to that prospect, but I am sure my hon. Friend will agree that British Aerospace will have to show that the project will be economically viable, that it will achieve a commercial rate of return, that Government support is essential to supplement its financial resources, and, indeed, that it has tried to obtain private finance.
§ Mr. Carter-JonesI assure the Secretary of State that we are all grateful for the fact that preliminary discussions have taken place, but when the submission comes in will he make sure that we have some positive action quickly, because we lost orders on the A320, despite its success, and the A330 and A340 have a high element of British parts?
§ Mr. ChannonI note what the hon. Gentleman says, but he cannot expect me to approve an application that has not yet been received.
§ Mr. Robert AtkinsDoes my right hon. Friend know that in a conversation that a number of his colleaues had last week with Franz Josef Strauss, the chairman of the board of Messerschmidt-Bolkow-Blohm, he made it clear that he wanted Britain to be in on the development of the A330 and the A340 and that, if we did not make a decision by the end of the year, he would try to allocate our share to European companies which were interested, and that would be a disaster for the British aviation industry?
§ Mr. ChannonYes, I heard that report. We are only in March, so there is plenty of time. I shall await the application from British Aerospace. If it wants to make one, it will be judged against the criteria that I have outlined.
§ Mr. ParkWhy does the Minister need the case proving all over again? Surely it was proved in the case of the A320, which is selling because of its high technology. Is it just a reflection of the fact that he is new to the job?
§ Mr. ChannonNo. It is a reflection of the fact that no one has made an application to me.
§ Mr. WarrenBefore my right hon. Friend receives the submission, will he consider the need to get from the Airbus industry proper accounts as to how its business operates, how it disposes of its money and what is the cost of producing its aeroplanes?
§ Mr. ChannonYes. My hon. Friend raises three important points.
§ Mr. Geoffrey RobinsonIs the Secretary of State aware that we accept that no formal application has yet been made, but he has erected a formidable series of hurdles for British Aerospace to overcome? Will he, in particular, confirm that although some money from private sector finance may be available, Government support will be inevitable if the programme is to get off the ground? Will he make it clear to the House today that he is not in principle opposed to public support for this important programme?
§ Mr. ChannonThe House would think it most unreasonable if I gave an answer to an application that I had not yet received. In the unlikely event of the hon. Gentleman holding my office, he would do the same.