HL Deb 20 February 1967 vol 280 cc582-602

5.54 p.m.

THE EARL OF KINNOULL rose to ask Her Majesty's Government what steps are being taken to ensure that in the 1970s the European aero industry is given a reasonable chance of meeting the requirements for civil aircraft of a European market of some 320 million people. The noble Earl said: My Lords, when I put down this Unstarred Question last Thursday, the purpose of it was to probe the Government on both the Concord project and the proposed European airbus. I did not know then that on the same evening the Minister of State of the Ministry of Technology, Mr. John Stone-house, was to address a private meeting of the Aviation Committee of the Parliamentary Labour Party on the very same subject. And, as is now the custom of this Government, this so-called private meeting turned out to be remark ably well reported in nearly every national daily paper the following day. But as some newspaper accounts differed from others as to what the Minister actually said at this meeting, I hope the noble Lord will take this opportunity to-day to confirm officially what the Government's intentions are for both these projects and so remove any doubts or suspicions that may still linger in the minds of our European partners.

Anyone who has taken the opportunity, as I did this week-end to look back over all the Questions and debates in Parliament as recorded by Hansard over the last year, would, I am sure, have reached the same conclusion: that progress on agreement about the European airbus between Britain, France and Germany has been painfully slow and nothing much else has emerged beyond the now familiar Declaration of Intent. The project was, I believe, first envisaged by Britain in 1961, but it was not until February 17 of last year that the British and French Governments met to consider a joint report on the feasibility and commercial attractiveness of the airbus. It was decided at that meeting to ask West Germany to participate in the project. We learnt this information from the noble Lord, Lord Beswick, during the course of his winding-up speech in the debate on the Plowden Report, which, if I may say so, was ably introduced by my noble friend Lord Jellicoe.

Nine months later, on November 21, the then Minister of Aviation, Mr. Mulley, admitted during an aviation debate in another place that progress on the airbus project had been disappointing. But he was able to announce that the industrial companies which had worked on the proposals of the airbus had been able to reconcile their differences and had submitted their joint proposals to the three Governments. At that time, in November, the three Governments were assessing and evaluating the proposals.

Nothing much else was heard from then on as to the progress of the airbus until February 1 of this year, when it was announced in another place that a meeting of Ministers of the three Governments had been held in January last at which there was general agreement on the project except for three outstanding points. In the first instance the national airlines of each country were to be sounded as to their future plans for orders of the aircraft; and secondly, the choice of an American or a British engine for the aircraft was still to be decided. Lastly, the financial participation in the project by the aircraft industry was to be looked into. The Minister then announced that a further meeting between the Governments was planned to take place this March, when one assumes that the final decision to launch the project will be made. Perhaps the noble Lord, Lord Shackleton, in his reply could confirm whether in fact this is the intention of the next meeting of Ministers in March.

So, my Lords, after a year of negotiation the balance of the future of the European airbus appears to rest in the hands of the three partners in the project—that is to say, the financiers of the aircraft, the British, French and German Governments, who will not move until they are satisfied that the project has potentially a world market as well as basically a home market; secondly, the builders of the aircraft, the industrial companies who appear to be happy now and who have reconciled their various interests but who have no doubt got an eye on the increasing danger of American competition from Lockheed; and lastly, the operators, the three national airlines, B.E.A., Air France and Lufthansa, whose commercial interests no doubt conflict but without whose firm support the project would scarcely become viable. What happens if, in fact, these airlines do not commit themselves to an order? This is a question which perhaps the noble Lord could deal with when he comes to reply.

THE MINISTER WITHOUT PORTFOLIO (LORD SHACKLETON)

My Lords, I am sorry I did not quite follow the drift of what the noble Earl was saying. Is he at the moment referring to the airbus?

THE EARL OF KINNOULL

Yes, I was referring to the European airbus. I was saying what would happen if the national airlines do not commit themselves to any firm order for the European airbus. This is a question which I do not think is hypothetical, for it is well known that Lufthansa have up to now never purchased any aircraft other than Boeings and it is well known that their seating requirements appear to differ from those of B.E.A. and Air France.

As the noble Lord will know, there are many doubts in the minds of British experts as to whether, in fact, this much-heralded European airbus will turn out to be a success, or whether it will turn out to be an enormous white elephant. As I understand it, from the British point of view, the reason for the doubts is that in, the first instance, our resources are already well stretched on the Concord project. But despite whatever attempts the present Government may make to try to cancel this project, the treaty of agreement between France and ourselves has no "break" clause in it, and unless we break the treaty the project must go on. The second reason for British doubts is that, so far as B.E.A. is concerned, it appears very unlikely that they will have any real need or use for the airbus within the next decade, as I understand that they are shortly to announce Stage II of the order for their re-equipment of aircraft. As I understand it, the choice for this order lies between the Trident III and the BAC 2–11.

When he comes to reply, perhaps the noble Lord could advise us of the latest position on the B.E.A. Stage II order. For instance, has B.E.A. yet submitted its proposals to the Government for this order? One must recall that some months ago the Chairman of B.E.A. considered the placing of this second order to be a matter of priority. Will the Government hold up their proposals until a decision on the airbus has been made; and, if not, what effect will B.E.A.'s second order have on the market for the airbus? These are the questions which I should be grateful if the noble Lord would answer when he comes to reply.

I believe that the Government's biggest question mark on the feasibility of the airbus is the enormous research and development cost which it would involve, and this at the very time when there is this large commitment to the Concord project. A sum of £400 million has been mentioned for the research and development costs of the airbus, of which Britain would be responsible for one-third. Perhaps the noble Lord could confirm whether this is what the Government at present expect. Yet at the end of all this expense, even if the national airlines agree to support and purchase the aircraft, there is still a strong danger that the Americans may produce a competitive aircraft which will scoop the world market from under the nose of the European airbus. Such is the problem which faces the Government. Even though I am sure Her Majesty's Government are anxious to co-operate with their European partners, the Government's purse has a bottom to it. They cannot afford a mistake, and they cannot afford to back the wrong aircraft, even if politically it is for the right reason.

It is my opinion, for what it is worth, that the present concept of the European airbus project should now be dropped, and for this reason. We have in Britain to-day, in the BAC 2–11, what I believe to be a world beater in short-haul air craft. Its design and specification—it is a 180 passenger seater—have been formulated, with variations if required. It is already, I believe, ahead of the European airbus, and it would cost far less for research and development. Its role would be similar to the airbus. What it requires now, of course, is the support of B.E.A. in purchases, and the support of the Government in finance for its development. I appreciate that it is a risk and, of course, it will be contrary to the advice of the Plowden Committee to "go it alone". But it is a risk which I suggest is well worth taking. The aircraft would, as I understand it, incorporate the new technology engine of Rolls-Royce, and would give that great company the chance of winning engine orders for other foreign aircraft.

But can Britain to-day afford to back both horses—the BAC 2–11 and the European airbus? I do not think we can. Therefore, the Government decision is a critical one, and one which will mean that possibly the last of the noble line of great, all-British designed aircraft will sink or swim, unless they can persuade their European partners to use the BAC 2–11 as the European airbus.

If I may now come briefly to the Concord project, I should appreciate it very much if the noble Lord could give us an up-to-date report on its progress, and answer certain specific questions of which I have given him notice. The question which I know is in the minds of many people is this. Why have the Government still not given the "go-ahead" to manufacturers, so that they may purchase the metals needed for production? Why the delay? Are they still uncertain about the project? I am told that any further delay on the decision for the production order could well jeopardise the 1971 production deadline, and I hope that when the noble Lord comes to reply to-night he will have some news for us on this matter. Another question which I should like to put to the noble Lord is this. What is the latest number of options which have been placed for the aircraft, and have B.O.A.C. as yet definitely committed themselves to a firm order? Perhaps the noble Lord could also advise us about the Government's plans for financing the production of spares and components for this aircraft.

It is my belief that, despite the many doubts which have existed, the Concord will prove to be the first major success in what I hope will be a long run of successful aircraft designed and built by the European aero industry. It appears well ahead of its only rival, the Boeing, and even to-day one reads of further delays and problems which face the Americans with their aircraft. But the future success of the European aero industry relies, I believe, on two essentials. The first, and most obvious, is the choice of the right aircraft, and the second—and as important—is the unswerving loyalty, support and confidence of all Governments participating once the project has got under way. In order to achieve the second essential, I believe that in future all treaties must have the same "no break" clause as was inserted for the Concord project, for there is little doubt in my mind that, but for that clause, the Concord would not be in the happy position to-day of being on the point of snatching from the American grip the world market for long-haul passenger aircraft for the next decade.

6.7 p.m.

LORD BALFOUR OF INCHRYE

My Lords, the noble Lord has certainly asked quite a question, and it is of a very wide character. Although he confined his remarks to the rather narrow aspect of a particular type of aircraft, his Question asks: what steps are being taken to ensure that in the 1970s the European aero industry is given a reasonable chance of meeting the requirements for civil aircraft…". Of course, that embraces a wide range of other issues, including airports, radio aids and the whole broad picture of civil aviation operations, upon which I certainly will not embark this evening.

My particular thought is for the British section of the European aircraft industry. It is true that we are co-operating with the building of the Concord, but it is not all brotherly love in Europe, and there is a great deal of commercial rivalry—and rightly—still existing, and which will continue to exist during the 1970s. Therefore, my thoughts are: What can Her Majesty's Government do to ensure that in the 1970s the British section of the European aircraft industry is given a reasonable chance of meeting requirements?

I think it is necessary to remember that our big rivals in the European market are going to be the Americans, and it is also as well to remember a funda- mental difference between the British and American development of civil aircraft. It is too late now, I am afraid, to reverse the situation, but for many years past America has poured money into research and development in connection with military types of aircraft, but with the thought in the background all the time that there shall be evolved a civil edition. Therefore, American civil aircraft have had this inestimable benefit of enormous sums of money being poured out on military budgets. We in Britain have rather cheeseparingly given limited amounts of money for the development of civil aircraft, and in nearly every case where the military have said at the time of the project's commencement that they have no interest in it they have later come along and said, "We should like a military version". We have been at a tremendous disadvantage in civil aviation, due to that fundamental difference between America and ourselves.

Now one says: "What can we do?" We have not the resources to do everything. I am afraid that I am a bit of a heretic over the Concord. I trust that the Concord will be a sound aero-dynamic proposition, but I fear it is never going to be an economic proposition having regard to the real price at which it should be sold and not the artificial price at which it may be sold. Having regard to the real price at which it should be sold, I do not believe it would ever be able to carry across the Atlantic passengers paying a sum which they would be willing to pay for their transportation, a sum that would cover the operating costs, depreciation and insurance. I think there is always going to be an operating deficiency in the case of the Concord. It may he that, for the sake of world prestige, it is a worthwhile effort. But it is water that has passed under the bridge; we are committed.

However, I hope that we shall limit our commitment on that if the expansion of that commitment is to be at the expense of the development of aircraft suitable for mass travel in the short and medium ranges. If it were Concord versus mass travel, I should vote every time for mass travel. It is curious to note that every time the fare to, say, Paris is lowered by 30s. or £2 a whole new category of travellers is tapped. I always think that civil aviation passengers are rather like a triangle. At the apex of the triangle one has the limited number of first-class passengers. Then, at the base of the triangle, there is the cheapest form of air travel, night economy. Every time that the fares can be lowered, the whole base of the triangle of aircraft carriage is broadened. That is why I would always go for mass travel as the means of economic success for our aircraft industry, rather than for a small number of very high-priced supersonic aircraft.

My Lords, how can the Government help? I believe that they can help in several ways. I think they can help by making quick decisions on vital issues which are at present unsettled. As is the case with many others who are interested in these matters, I am extraordinarily worried that we are getting out of phase in our aircraft and our airports. I am afraid that we are going to develop aircraft which carry 150, 200 or 250 people, but that we shall suddenly find that we have lagged behind as regards the alteration of our airport buildings—the waiting rooms, the buildings providing the general travel facilities and the Customs. I hope that Her Majesty's Government are going to phase all those requirements in line with the development of aircraft.

Again, I think the provision of new airports will help the British aircraft industry to play its part in the seventies. I am not going to embark upon where the third London airport should be, but let us remember that, particularly bearing in mind the artificial, uneconomic restrictions which are being put upon the use of Heathrow, due to the noise factor, the need for a third airport is increasing month by month. I believe that the Government could help the British aircraft industry in the 'seventies by making now clear and courageous decisions on the noise levels which are acceptable, in order to allow the designers to go ahead.

My Lords, I believe that, apart from providing a great deal of money, the Government's chief job is not to hold up essential decisions. The noble Earl who asked the Question spoke about decisions being wanted by British European Airways. I am still too close to the picture to speak upon that, except to say that when those who are responsible for operations, present and future, ask for positive decisions, having given the Government all the information they possibly can in order to allow the Government to arrive at those decisions, there should be a spirit of urgency within the Administration to give those decisions without delay.

6.17 p.m.

EARL JELLICOE

My Lords, I should like to thank my noble friend Lord Kinnoull for putting down his Question to-day. I myself feel that, though it is sometimes useful to discuss these very big problems of the aircraft industry in a full-dress debate, it is also useful at times to have the chance of discussing sectors of these large problems. I share the belief of both my noble friends that we need a vigorous and viable aircraft industry in this country. I also believe that one of the conditions on which the health of the industry depends is really effective collaboration with our European partners. For that reason, I think that, speaking personally, I would at this stage give rather more benefit of the doubt than my noble friend Lord Kinnoull was inclined to give to the airbus, although I entirely agree with him that early decisions are needed here—and I think he made out a fairly powerful and cogent case for Government support for the BAC 2–11 project.

I think I should also be inclined to place a slightly different emphasis from that of my noble friend Lord Balfour of Inchrye on the Concord project, and it is to that subject that I should like to address myself briefly. The news for the Concord project, as I understand it, is at present rather good. From all that I have been able to ascertain, the technical and industrial collaboration between the firms concerned in England and France, both on the airframe side and on the air-engine side, is quite excellent. There have been delays in the United States, and this means, as I understand it, that we have a good chance of maintaining a good lead for the Concord over the American S.S.T. Furthermore, according to American airline chiefs there are likely to be continuing sales for the Concord, even after the American S.S.T. has come into production. All this is reflected in a growing order book (or rather, I suppose one should call it at this stage, a growing option book) for the Concord. Surely, if this is the case, this is the moment for the Government to take bold and bullish decisions about this project.

One of the points which rather worry me is the contrast between our national attitude about this type of project and the attitude which I detect when I go over to France. One finds that they make the most of their technical successes in this field—the Caravelle, the Mirage, the French space programme. One does not find the same feeling of enthusiasm in this country for technical successes. And I find this rather depressing. I believe we have in the Concord the chance of a real success, a real break-through, both technically and commercially. I hope, therefore, that the noble Lord, when he comes to reply, will be able to take a rather more robust and optimistic line than the rather niggling line which the Minister of State, Mr. Stone house, is reported to have taken at the recent private meeting of Labour Party Back-Benchers in another place to which my noble friend referred. As he said, it was one of those private meetings in another place which now provide most of our daily breakfast reading. I know there are problems with the Concord at present, not least the problem of sonic boom. I know the Americans are ahead of us in the practical investigations which they have made into this very difficult problem. It is my understanding that Anglo-French trials in depth are likely to begin soon, or have been initiated. I should like to ask the noble Lord whether he has anything to say on that particular score.

That said, I should like to endorse what my noble friend Lord Kinnoull has said on the production aspects of the Concord programme. We are coming to the point when hard decisions are needed on the production programme. Those decisions need to be urgently taken if the Concord is to meet its dateline; and it is extremely important that it should meet its dateline if it is to maintain that invaluable two or three years' lead over the American supersonic transport. In this context, I would put three questions to the noble Lord, Lord Shackleton. In the first place, we read that formal authority is required for the two preproduction models in the larger version. Has that authority been given? Secondly, there is the question, which has been raised by my noble friend, of the authority which will be required soon for orders for certain of the long-lead items in the production programme. Can the noble Lord tell us whether that authority has been given? And, if not, when will it be forthcoming?

Above all—and this is my third and final question: when will the production programme itself be decided? What production rate will be decided? One reads that a decision is required between a production rate of three aircraft a month and one, perhaps, of five aircraft a month. A lot of people "in the know" feel that a decision should be made to opt for the faster production rate if only because that will mean we can catch the full market for the Concord.

None of us—and here I agree with my noble friend Lord Balfour of Inchrye—would seek to hide the fact that the Concord is not only a great venture but also a considerable gamble. Frankly, I am not certain that the Government of the time, had they known then what is now known about the great costs of this programme, and of the sonic boom problem, and of the other options which could have been open to us in the big subsonic field, would have been justified in taking the decision they took some years ago. Nevertheless, I would emphasise that that decision was firmly taken by the two Governments. It was confirmed, after a major hiccough, by the present Government; and the programme is well down the road. It has almost reached the point of no return. At least, if it goes on, we shall reap rewards; if it stops, we shall have had only the expenditure. The prospect of great commercial and technical success is now visible; and failure at this stage would represent a great setback to European technical collaboration. It would also, in my view, do a great deal of damage to industrial morale in this country. I hope therefore that the noble Lord will confirm, when he replies, that the Government are giving full, and full-blooded, support to the Concord project.

6.26 p.m.

LORD SHACKLETON

My Lords, I must say that until to-day I was not very clear as to the purpose of the Question put down by the noble Earl, Lord Kinnoull. Indeed, I came to the House prepared to give quite a lot of information on the steps being taken to ensure that in the 1970s the European aero industry is given a reasonable chance of meeting the requirements for civil aircraft of a European market of some 320 million people. The noble Earl, however, confined his speech to rather a smaller area. In fact I am not quite sure which 320 million people the noble Earl has in mind. I find that I have to add one or two countries which are certainly not in Western Europe to reach that figure.

THE EARL OF KINNOULL

My Lords, I think the population is rising all the time. I was referring to Western Europe.

LORD SHACKLETON

This is an extrapolation; this is the population that perhaps will exist in 1970. That is a very interesting thought. But I shall not waste the time of the House by going into any subjects other than those actually raised. I must say, having heard the three noble Lords, that I find myself more in agreement with the noble Lord, Lord Balfour of Inchrye, and the noble Earl, Lord Jellicoe, in their approach, than I was with the noble Earl, Lord Kinnoull—especially when he laid down this firm rule that no Government should ever negotiate a contract with a break clause. That seems to me to be exceedingly dangerous.

This is not to suggest, however, that the debate has not been useful. I agree with the noble Earl that these smaller debates, in rather an easier and relaxed atmosphere, help to clarify ideas. Unfortunately, I cannot say that from what we have heard to-day the Government have been given a very clear steer as to which particular horse they should back. I greatly appreciate the frankness of the noble Earl in regard to the problem of the Concord. I wholly agree that we are committed on this path. At the same time, I must say to the noble Earl that it has always been conceivable that the French might decide at some stage that it was not an economic proposition. It always seems to be assumed, because at one stage there was some doubts in this country and the French were very determined to go on, that there were not some people in France also who had doubts about this programme.

My Lords, I will answer as many as possible of the points that have been raised. I shall deal first with the noble Lord, Lord Balfour of Inchrye, because I know that he has an appointment. I was very interested in his remarks. With his long experience in this field, there is a great deal of wisdom in what he said. I am sure that on social grounds, and also, I should have thought, on general, national and economic grounds, the argument in favour of mass travel must win the day. But of course we do not follow only one line of argument. In this respect I am sorry that the noble Earl was so hostile—that was the impression he gave—to the airbus. I understand his reasoning. He is afraid that it is holding up urgent decisions on other projects. But one thing is apparent: this is an immensely complex subject. This is an area where any Government—Governments of the past or this Government—have to think very hard indeed before taking decisions. It is peculiarly difficult in the aircraft field, because there is this marked divergence between the military and the civil; and this again was one of the points which was so interesting about the remarks of the noble Lord.

It is a fact that over a long period the American aircraft firms, particularly regarding the production of larger aircraft in which they have always been predominant (even right back to the war, when we looked to America for transport aircraft such as the B.24), were in a much stronger position to get into the civil market than we were, who had made such brilliant pioneering development in more specialised types of aircraft. This is something which to the best of our ability we must always bear in mind. It will be exceedingly difficult to achieve this correlation; but clearly if it can be achieved at any point (obviously it cannot be done in certain specialised types of aircraft) the advantage to the civil and military aircraft markets will be very great indeed. Therefore I noticed his philosophy in this matter with great interest.

The noble Lord also made a plea that we should provide airports and face the question of sonic boom. Again, these are matters which are engaging a great deal of Government time. The sonic boom, about which I shall not speak at great length to-day, presents a very difficult problem. My own feeling—and I am expressing purely my personal opinion; one may be wrong, one reads so many different points of view—is that there is a tendency to show too great a fear of the sonic boom. The noise of aircraft that afflicts us, especially those living near airports and military airfields is, I should have thought, at least as trying as, and probably infinitely more trying than, the sonic boom would be. But this is a matter on which there will be further study.

I am afraid that I am not able to answer the point made by the noble Earl about the extent of the possible further tests in this country. As he knows, there have been very extensive tests in the United States and in France, and all one can say is that they have been very inconclusive. I expect that the noble Earl read the report of the tests which were carried out over, I think it was, Oklahoma—

EARL JELLICOE

It was Arkansas.

LORD SHACKLETON

Yes, my Lords; but I must say that by the time I read the report through I was as uncertain about the conclusions to be drawn as were those who compiled the report. There is a good deal of supersonic flying going on over France; I do not know how much there is in the way of complaints. Here in this country, of course, we limit supersonic flying. We do not allow the R.A.F. to fly supersonically over England. These are matters which will have to receive very careful consideration. I have noted the point the noble Earl has made on this matter.

LORD SOMERS

My Lords, if I may interrupt the noble Lord, may I ask whether I am right in supposing that it is virtually impossible to silence a jet engine?

LORD SHACKLETON

There seems to be a certain philosophic aspect here. I am not sure from my philosophy days whether this is—no; it is not the ontological argument; it is the gramophone playing in the desert. I do not think it is ever possible completely to silence a jet engine. If the machine is flown high enough, of course, you will not hear the engine. But you may hear the sonic boom. I do not know whether that answers the noble Lord.

LORD SOMERS

My Lords, I was thinking more of those who live near airports.

LORD SHACKLETON

My Lords, all I can say is that research is going on and that steps are being taken; and as we know, people who live near London Airport are entitled to a certain amount of noise-proofing for their houses. But I do not want to get further into this aspect, unless the noble Earl wishes to ask a question.

EARL JELLICOE

My Lords, I do not wish to ask a question on the philosophy of sound; my question is a simpler one. I wish merely to re-pose a question which I had asked the noble Lord, whether he had any knowledge of the proposed Anglo-French trials on sonic boom which I understood were shortly to be under taken or had already started. I must apologise for not giving the noble Lord notice of that question. Perhaps I could put down a Question on the subject for an Oral Answer.

LORD SHACKLETON

My Lords, I think the noble Earl is a little premature in this matter. I do not think that there is any agreement to this effect at the moment, but if the noble Earl wishes I will try to give him a considered Answer. But I am quite sure that in fact there is no agreed series of trials of an international kind.

Now, if I may, I will turn to certain of the points which have been made and make a few general remarks. On this rather narrow, but interesting, field, I will not rehearse the general policy of the Government. We threshed this out, and I think that there is general agreement (although from time to time there is a little sniping) that we should move increasingly towards the association of the British and other European industries in a European aircraft industry. Predominantly, this means the French, but it also means the Germans and others, too. This has been fully accepted, and I must say that I have observed—and I think it fair to say this—that a much greater effort has been put behind the drive towards this objective in recent times. I am not making a Party point about this. I think that the "penny" dropped slowly with the previous Government and we are pressing on. There is a growing pressure towards more European co-operation. This may or may not appeal to the noble Earl—

EARL JELL1COE

My Lords, I apologise for interrupting the noble Lord again. I am not making a Party point either, but I would merely remind him that the "shilling" in the Anglo-French Concord had dropped before the noble Lord and his Government took office, and they had to extract it from the machine at one stage.

LORD SHACKLETON

My Lords, I do not think I will follow the noble Earl. It seems to me that he is getting into extremely dubious territory on this matter. What I was about to say was that the noble Earl did not seem to me to be a great enthusiast for collaboration; that what he was after was firm national decisions, which is something which I think it would be wrong for us to pursue regardless of the implications in the international field. We have taken the initiative. We still believe, with Plowden and, I believe, with the Party opposite (or at least with the Front Bench opposite), that we must make an ever-growing effort to make a success of European co-operation; and this undoubtedly imposes certain difficulties. It is always easier to go ahead and do something on your own; you do not have to consult so many people. It would have been simpler, for instance, for us to have gone ahead with a purely Anglo variable geometry aircraft, but I am absolutely certain that we were right to go ahead on a joint effort. My Lords, there have been a number of meetings between the Ministry of Aviation, and now the Ministry of State for Technology, with their French and German counterparts. There are continuous and detailed exchanges going on to further these very important collaborative projects, and to iron out the immense range of technical detail.

I think that I should again refer, on the subject of collaboration, to the variable geometry aircraft. Not only is it of importance from a military point of view; because although not related directly to design, it provides a real stimulus to the British and French aircraft industry. Undoubtedly there will he technical fall-out from that project. This is very important for ensuring that there is an effective European aero-industry.

A great deal has been said about the Concord. This is not the time to discuss whether it is the right project, or to rehash some of the arguments we have had in the past. I would say that it is proceeding on schedule, and that everybody concerned with it is showing great determination to make a success of supersonic transport and to seize the market while it is there. I am sure we are all agreed on this. I cannot say whether there is, perhaps, less obvious enthusiasm in this country for it—we have not made a social survey. The suggestion that there may be more national pride in technological achievement in France is interesting. If this is so, it is a matter on which we need to do more thinking, because undoubtedly this is a subject in which very properly national pride can find an expression.

There is no delay in the Concord programme. I am informed that satisfactory interim arrangements have been made for production financing in the coming months, and that the need for large sums of money does not arise immediately. The Government are discussing with the manufacturers the best way of meeting their future needs. We have all heard that the manufacturers wish that the Government would place production orders, and we have all heard that successive Governments have been exceedingly bland, as I have been, on this subject. I will simply say that I will take note of what has been said. I am sure that there has been no delay, but it is much nicer for manufacturers to know that orders are being placed and where the money is coming from. But there is always an element of risk, and there is a due point somewhere between the position of the aircraft manufacturers and the position that Governments take up in this matter.

THE EARL OF KINNOULL

My Lords, before the noble Lord leaves that point, is he saying that the Government are claiming that there is no real need for manufacturers to call for advance production orders on the metals they require?

LORD SHACKLETON

My Lords, I am saying that the steps the Government have taken are adequate and satisfactory to meet the needs of manufacturers. This applies in the field of long-need items. But I have noted what noble Lords have said. If they can give some further evidence on this, I will inquire further; but that is as far as I can possibly go now.

The Government will not be placing the production orders. This will be for the airlines. Therefore, the need is for providing production finance in anticipation of orders. The Government are discussing in detail with the companies concerned their future needs and how these can best be met. It should not be a pressing problem this year.

The noble Earl asked me a question on the total potential market for aircraft. I do not think that it is for me or for the Government to hazard a guess on this. There are enough occasions on which we have to stick our necks out, and this is one in which we are in no better position than many people who have made their own estimates, which have been published in the Press. But I would agree that the potenial is a large one. How much of it we shall meet depends on a number of circumstances which we cannot yet foresee, but already 70 delivery positions—it is rather like putting a boy down for school when very young—have been reserved by airlines throughout the world, including eight for B.O.A.C. and eight for Air France. But it is really too early to expect airlines to place firm orders at this stage. Inevitably there is an element of gamble in this, as the noble Earl said, but we have entered into this gamble, with every hope that it will pay off.

Let me say a few words about the airbus. There is no doubt in the Government's mind that a successful collaborative European airbus would be an important step towards further technological and economic co-operation in Europe. Against the background of rapidly growing traffic, particularly on short-haul routes, and following an initiative of the European airlines themselves, British, French and German officials, with the industry participating, have been studying for over a year the possibility of building an airbus. I was not sure whether the noble Earl was suggesting that we were taking a long time over it, or that it might be a mistake to go on with it at all. I think that what noble Lords are worried about is whether there is a real sense of urgency.

My impression is that there is a sense of urgency, but we cannot cut corners in this difficult field. By the summer of last year, the three Governments had agreed on the broad specification for an airbus: 250 seats, with a stretch potential to 300;a range of about 1,500 kilometres—about 1,000 miles—anda target in-service date of 1972. In October, 1966, chosen manufacturers in the three countries submitted a joint airbus report, and there was a great deal of argument on the main characteristics. These are now being evaluated.

There was a meeting of Ministers at Bonn early last month. There will be discussions again at the end of this month. I cannot tell the noble Earl—I wish I could—how far definite decisions will emerge. There are some hurdles to jump, but I think that, when have got the further views of the European airlines, Ministers ought to be in a position to meet and consider the next steps.

The preliminary costs are still under examination. The noble Earl mentioned a figure, but I fear that I am not in a position either to confirm or deny it. I would rather say nothing on this matter, and I hope that he will not press me. On the selection of the engine, I hope that it will be a European engine, and certainly one which includes a great deal of British technology. We see the British aircraft industry playing a major role in any future European aircraft industry.

The noble Earl referred particularly to the equipment of B.E.A. He will recall that the Government took a firm decision that B.E.A. should adopt British aircraft rather than American. Following this decision, the Corporation have already ordered 18 BAC 1–11s in the 97-passenger version. B.E.A. are already considering how best to meet their requirement for a larger passenger aircraft. The noble Earl referred to the BAC 2–11, which I understand will seat 185 passengers. I must point out that this concept is at a very early stage. Then there is the Trident, 139-seat version. No proposals have yet been submitted by B.E.A., and it is too early to say what solution will be adopted.

At this point, I was going to come on to a wide range of other aircraft. It seems to me, however, that there is no need for me to do so, but I think we ought to remember that there are other projects of an important kind. There is the Handley Page Jetstream, which may have an important market, and which is receiving aid from the Government. If one mentions Handley Page, then one ought to mention the Hawker Siddeley 125, which has been extremely successful. There are many others, coming down to the smallest size, the Britten Norman Islander.

I believe this is a difficult field for decision-making, but I can assure the noble Earl that the Government are giving this subject very high priority, and that they are determined to take decisions at the earliest opportunity, with all urgency, but also with due forethought. I hope the noble Earl will be satisfied that, although I have not been able to answer all his points, I have at least indicated an attitude of mind which I believe is definitely the attitude of mind to be found, not only in the Government, but in the British aircraft industry itself.

House adjourned at nine minutes before seven o'clock