HL Deb 30 January 1984 vol 447 cc445-6
Lord Beswick

My Lords, I beg to leave to ask the first Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will confirm that there were no costs to public funds for the development and production of the BAe. 146 civil aircraft following the creation of British Aerospace.

The Chancellor of the Duchy of Lancaster (Lord Cockfield)

My Lords, the facts are as follows—the Government's approval for full-scale development of the BAe. 146 Aircraft was announced on 10th July 1978. Subsequently the Government advanced £33 million of public dividend capital to British Aerospace in December 1979 and a loan of £22 million from the National Loans Fund in March 1980. These sums, as well as money available from internal resources, were in support of British Aerospace's overall financing needs, which included of course the development costs of the BAe. 146. The costs of BAe entry to the airbus consortium were the subject of a separate grant of £50 million in March 1979.

Lord Beswick

My Lords, I am much obliged to the noble Lord. Is he aware that the purpose of the Question was to set the record straight, in view of the more than somewhat misleading Answer given in the other place? First, is it not surprising that he now quotes the sum of £33 million whereas in that place they mentioned a sum of £100 million? Is it not more correct to say that there was absolutely no cost to public funds of the 146 aircraft? Is it not right that the public dividend capital was for the general operations of the corporation, it was more than covered by the assets, and on it a proper dividend was paid each year?

Lord Cockfield

My Lords, the reply given in another place, which I have in front of me, was entirely accurate. So far as the rest of the noble Lord's question is concerned, I realise that these are matters of some controversy; but, with respect, they arise directly out of decisions taken by the Labour Government and announced by Mr. Kaufman—who was the Minister then responsible—on 10th July 1978. If the noble Lord reads Mr. Kaufman's statement, which appears in col. 1103 of Hansard for that date, he will find that the link between the development cost of the HS. 146 (as it was then known), and the further finance from the National Loans Fund and advances of public dividend capital was made in that statement.

Lord Beswick

My Lords, the noble Lord can refer to as many statements as he likes; but the fact still remains that there was no cost directly occasioned by the 146. If the question had been asked, "What was the cost to the public purse of the 125–700 series and 800 series, of the development of the 748, of the A.300, the A.310 and the Jetstream?" would the noble Lord have referred in each case to this amount of public dividend capital? Would he have tried to get away with that?

Lord Cockfield

My Lords, neither I nor the Government that I represent have any primary responsibility for these matters. They arise directly from decisions taken by the then Administration, and I can do no more than inform the noble Lord what the facts are and what statements were made when those decisions were announced to the House.

Lord Beswick

My Lords, will the noble Lord give me an assurance that when the Conservative Central Office next compile an amount of money which they say has been handed over to public enterprise they will not include these figures quoted in the other place or the figures quoted by him as cost to the Treasury?

Lord Cockfield

My Lords, I am not prepared to give the noble Lord any such assurance. I started by saying that this is a matter of some controversy, and therefore I have deliberately confined myself to a statement of the facts. It is open to anybody who is interested to place whatever interpretation on those facts that they wish.

Lord Beswick

Finally, my Lords, on this question, would it not also have been relevant to say that when British Aerospace was given away—or half of British Aerospace was given away—to private enterprise—

A noble Lord

Sold!

Lord Beswick

—given away to private enterprise, there was £256 million of reserves in the kitty, which more than covered those figures the noble Lord is now talking about?

Lord Cockfield

My Lords, the noble Lord is now pursuing quite a separate matter. The Question relates to the development costs of the BAe. 146 civil aircraft, and I have done my best to answer the Question.

Lord Molloy

My Lords, the noble Lord quite rightly says that there has been much controversy over this issue. Is he not aware that the controversy has been about whether the facts he relates are really the facts? That is what it is about.

Lord Cockfield

My Lords, the facts are not in dispute at all. What I have said follows precisely what Mr. Kaufman himself said in 1978. I can do no better than that.

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