§ 2.55 p.m.
§ LORD BALFOUR OF INCHRYEMy Lords, I beg to ask the Question of which I have given Private Notice.
§ [The Question was as follows:
§ "To ask Her Majesty's Government whether, in view of the decision not to support the development of the BAC 2–11 aircraft requested as first choice by B.E.A., they are willing to give the Corporation a written direction under the appropriate Act for purchase of the Trident 3B or some other less suitable type; and further, how Her Majesty's Government propose now to implement the pledge of ensuring that D.E.A. can operate as a fully commercial undertaking with the fleet it requires."
§ LORD BESWICKMy Lords, The first step is for B.E.A. to consider the future composition of their fleet in the light of the Government's decision to support the development of the Trident 3B but not that of the BAC 2–11, and to approve the purchase of the Trident 3B by B.E.A. should the Corporation so decide. Section 13 of the Air Corporations Act, 1967 provides the statutory basis for settling the lines of B.E.A.'s investment with the approval of the Board of Trade. The implementation of the Government's pledge to B.E.A. of August 2, 1966, which still stands, must depend on the type and number of aircraft finally decided on.
§ LORD BALFOUR OF INCHRYEMy Lords, this is a serious decision which penalises the economic efficiency of B.E.A. While I accept that there is a balance of considerations in the decision, as is made clear in the Second Report of the Committee on Nationalised Industries, are the Government now not making B.E.A. travel "second-class" economically, and should we not debate this very grave step, both in its general implications to national policy on a wider front than B.E.A. and also in its particular application? I have one further question. Are not the Government putting 1271 B.E.A. in the corner, denying first the Boeing aircraft, secondly the 2–11, and facing B.E.A. with no alternative to the Trident 3B? If that is so, would it not be fair for the Government to indicate to B.E.A. that they expect B.E.A. to order the Trident, and so take from the shoulders of B.E.A. the responsibility of being forced to use something which is not the most suitable for the purpose required and an aircraft which, the Government themselves admit, has slender prospects of any export orders?
§ LORD BESWICKMy Lords, I can well understand the noble Lord's feelings about this matter, but I am sure that he would not wish to over-emphasise the difficulties faced by B.E.A. If they decide to buy the Trident 3B, they will be buying an aircraft with fine passenger appeal, whose running costs will be at least equal to, and probably superior to, those of the Boeing 727 which they originally wanted to buy. So far as a debate is concerned, we would be very ready to consider through the usual channels the possibility of a debate, though I should have thought that it would be better to allow the Corporation time to consider the implications of the Government's decision.
As for the noble Lord's last question about putting B.E.A. "in a corner", I would point out that the Corporation are entitled to the freedom to make their own decision as to the equipment they would like to buy. But I am sure that the House would agree that Her Majesty's Government must be free to decide, particularly in the present economic situation, whether they have to find something like £120 million in order to finance the development of a particular aircraft.
§ LORD CARRINGTONMy Lords, the noble Lord has said on two occasions, "If B.E.A. decide to buy the Hawker Trident". What I am not quite clear about is: what other alternative is possible for them?
§ LORD BESWICKMy Lords, that is not for me to say. This is a matter for the Corporation. All I am saying is that Her Majesty's Government could not agree to the lines of investment which would be involved if the BAC 2–11 were purchased. Secondly, as I have already made clear, Her Majesty's Government cannot in the present situation 1272 agree to the financing of the BAC 2–11, which would require something like £120 million of public money.
§ LORD CARRINGTONMy Lords, I quite understand the noble Lord's reasons. But he keeps saying: "If B.E.A. decide to buy the Trident", and what I am asking is: what else can they do?
§ LORD BESWICKMy Lords, as I am sure the noble Lord will know, as he follows these matters very closely, B.E.A. have already decided to buy—in fact they are now being made—a number of BAC 1–11 500 series. There is also a possibility in the further future, if the European airbus comes along, that B.E.A. may decide to use the equipment which they have now and which they have already ordered.
§ LORD OGMOREMy Lords, may I ask the noble Lord whether he can say to what extent the decision of the Government, in forcing this decision on B.E.A., has been governed by their desire to enter into joint commitments with other European countries to build a European aircraft, instead of allowing B.E.A. to use British aircraft?
§ LORD BESWICKMy Lords, as the noble Lord will know, the Select Committee, which went into this question very closely, advised that if in future this country were to build a large new civil aircraft, it should only do so if there was European agreement as to the specifications, and European agreement as to the financing of it. Undoubtedly, this policy was at the back of the minds of Her Majestys Government when they came to the present decision. But as I have said, the overwhelming factor in all this is the necessity of finding, if they were going in for the BAC 2–11, something like £120 million.
EARL JELLICOEMy Lords, may I ask the noble Lord two supplementary questions arising from his answer? Can he tell us whether, given this decision, the British airframe industry will now be taking the design lead in any major commercial project? Secondly, can he give an assurance that the Government have not abandoned possible support for the Rolls-Royce RB 2–11 engine?
§ LORD BESWICKMy Lords, the RB 2–11 project is not affected by this 1273 decision, although of course it would have been a fine thing had there been a British airframe into which the engine could have gone. The company have announced that the RB 2–11 will be developed, and there are good export prospects. So far as the noble Earl's first question is concerned, the design lead of another European project ought to be taken this time by Britain.
EARL JELLICOEMy Lords, surely the noble Lord does not mean the European airbus, the design lead for which has been taken by Sud-Aviation?
§ LORD BESWICKNo, my Lords. I had that in mind. That, of course, has been taken by the French, and in the event of a further European project the design lead should be taken by this country. No doubt this point was in mind when the Minister said that we were already considering the possibility of a design study of a mini-airbus.
§ THE EARL OF KINNOULLMy Lords, could the noble Lord tell us what stage of development the RB 2–11 has reached so far, and if necessary whether the Government will give a further development contract to assist export orders? Secondly, what difference was there, in fact, between the proposed operating costs of the Trident 3B and of the BAC 2–11?
§ LORD BESWICKMy Lords, I cannot give the actual figures, but undoubtedly the noble Earl is right in thinking that the 2–11 would have been the better aircraft of the two. There is absolutely no doubt about that. That is why B.E.A. wanted to buy the BAC 2–11. So far as the RB 2–11, the engine, is concerned, I cannot, without notice, say anything about Government support of that.