§ Question again proposed, That this House do now adjourn.
§ Mr. Speaker
Before the hon. Member for Gloucestershire, South (Mr. Corfield) resumes, I may say that the right hon. Gentleman the Member for Battersea, North (Mr. Jay), at my request, has withdrawn his half-hour Adjournment which was due to be taken later today. That means, therefore, that we shall have more time for this debate. If this debate were to finish about 3 o'clock it would be in ample time.
§ 2.30 p.m.
§ Mr. Corfield
I was saying that it seemed difficult to visualise how the next generation of civil airliners could be produced without some kind of subvention on lines that have made possible, in the past, the production of the three successful current British models.
According to some persons of great experience, both of the aircraft industry and of airline operation that I have consulted, one of the most hopeful markets appears to be a replacement for the Viscount and Convair starting about 1963. No doubt some of these aircraft will be replaced by larger aircraft, such as the DH 121 and the Convair 600, but there seems likely to be a large demand for a smaller aircraft carrying about 70 passengers, with a range of between 1,400 and 2,400 miles and a speed of about 560 m.p.h. If that is so, and the estimates of a possible market of up to 600 aircraft are correct, it seems that no time should be lost in getting out designs for an aircraft of that type and getting it under way before we are faced with foreign competition.
I want to emphasise that I do not believe all the problems of the aircraft industry can be solved by Government action alone. For some years I have been a farmer. It is one of the stalest of music-hall jokes that farmers blame the Government for everything that goes wrong, including the weather. I am bound to say that I find a good deal of that "disease" spreading to the aircraft industry, because there is much that can be done by the aircraft firms themselves.
1363 I am certain that my right hon. Friend's policy of encouraging amalgamation is sound. I cannot see how any smaller companies today can command the finance to play their part, even with Government assistance, in developing a modern aircraft. It means that before one generation of aircraft has been sold in sufficient numbers to recoup the enormous expenditure, which may be anything between £10 million and £20 million, they have to be working on the next generation. I would have thought that amalgamation should spread not only between aircraft firms, but between aircraft firms and firms engaged on the other activities.
A remarkable change has been accomplished by the Hawker Siddeley group in the last few years by which, whereas, only a few years ago, they were dependent on aircraft to the extent of over 60 per cent., today that has dropped to less than 40 per cent., and a similar diversification has been carried out by Blackburn Aircraft. I am glad to know that the Bristol Aeroplane Company, in my constituency, is now associated with Hawkers, and I hope that my hon. Friend and his right hon. Friend will bear in mind that those companies which are endeavouring to carry out Government policy should have considerable consideration given to them when it comes to the placing of orders. One of the few things that seems to be agreed among the aircraft companies is that they must have Government money and the maximum of independence in its use. I find at present that little hard thinking appears to be going on as to how these conflicting elements are to be reconciled, unless, indeed, it is proposed that Parliament should abrogate its main and probably most historic function of supervising supply.
It seems that there is a place for an organisation, perhaps to be called an aircraft development board, able to draw on all the best brains and experience in the industry, and the airline operators could get together and help my right hon. Friend in the very difficult problem of settling priorities, and also to establish some degree of co-operation amongst the companies themselves. Today, with these enormous concerns and the great amount of people depending upon them, stakes are far too high for cut-throat competition. I believe that there is much 1364 the Government can do, but I also think that there is much the aircraft companies can do.
I end with a word on the subject of redundancy. No doubt some degree of redundancy is inevitable. I hope it will not be necessary to go back to quite such low figures as existed before Korea. That would seem to imply that we do not hope to maintain our proportion of the production of aircraft in the world in an age when the number of aircraft flying must be constantly increasing. No doubt some redundancy will be inevitable and I believe that it can be ameliorated only by diversifying the employment in the industry, preferably outside the industry itself, and by giving the maximum consideration to those who are threatened by the inevitable anxieties and dislocations that redundancy causes, and who, in my view, deserve well of the companies they have served.
§ 2.36 p.m.
§ Mr. Maurice Edelman (Coventry. North)
The hon. Member for Gloucestershire, South (Mr. Corfield), who has just spoken about the decline of the aircraft industry, has reflected the anxieties felt on this side of the House on that subject, which have been expressed in a Motion put down by the hon. Member for Hayes and Harlington (Mr. Skeffington) and myself in conjunction with a number of other hon. Members, asking for a committee of inquiry to go into the question.
§ [That this House, viewing with grave concern the contraction of the aircraft industry and the consequent dispersal of skilled men and valuable design teams, and bearing in mind its importance in regard both to the nation's defence and economic interests, and noting the large sums of public money already expended in the industry, urges the Government to appoint an independent Committee of Inquiry to consider and make recommendations as to the future of the aircraft industry.]
§ I could not help feeling that the hon. and gallant Gentleman was somewhat complacent about the prospect of redundancy, and I was astonished that he did not even refer to the figures of actual and prospective redundancy in his own constituency, which I understand will be considerable.
§ Mr. Corfield
If the hon. Gentleman will refer to HANSARD, he will find I 1365 made a speech on that subject only the other day. I did not think it was proper to bore the House with a repetition in a half-hour's debate.
§ Mr. Edelman
I cannot help feeling that the House would not be bored by figures which are at the heart of the problem.
§ Mr. Corfield
But would not the hon. Gentleman agree that it is much more important to try to find a cure, which can only lie in the future of the aircraft industry itself, than to repeat the figures?
§ Mr. Edelman
The fact is that it is impossible to understand the malaise of the aircraft industry today unless we pay due attention to the employment situation and unless we understand the origin of what is happening.
The origin of the transformation that has occurred inside the aircraft industry lies in the Defence White Paper, as a result of which Government orders are to be substantially cut back. I have already raised in this House at Question Time the matter of how many men will be made redundant in the industry, and apart from its national application I have a direct constituency concern in this matter because of the many thousands of men in my own constituency who are so employed.
I have been discussing this matter with leaders of the industry and have been assured on the highest authority that within the next two years, not five, if the present situation still obtains, if there is not to be a substantial increase in Government orders, the number of people who will be made redundant will be 100,000. That is a figure of the highest significance. Today the industry, including those employed in ancillary industries, employs an overall total of about 330,000, of whom about 250,000 are directly concerned with aircraft production.
If there is to be, as is intended, a switch-over to the production of ballistic missiles, we have to bear in mind that the labour force necessary to produce 60 ballistic missiles is equivalent to the labour force needed to produce one aircraft. In other words, for every squadron of aircraft it is possible with an equivalent labour force to produce between 600 and 700 missiles. Put another way, the 1366 prospect of unemployment inside the aircraft industry is likely to be serious unless there is a substantial change in Government policy.
It is not really the dispersal of the general labour force which is important. What is of immediate and acute concern to those occupied with the destiny of the aircraft industry is the fact that design teams will also be dissipated. I was told only the day before yesterday that at one major British firm 17 people concerned with designs and draughtsmanship have taken employment in the United States of America. In other words, the great skill which we have inside the aircraft industry is likely to be dispersed, wasted and lost to our competitors unless prompt and dramatic action is taken.
This has a particular importance in the export trade, and the hon. and gallant Member for Gloucestershire, South rightly stressed the great value of the aircraft industry to exports. The significant figure which I should like to offer the House in this connection is that for every pound of material that goes into an aircraft the value is of the order of £l6-£18 compared with an equivalent ratio of 5s.-10s. for every pound of material in a valuable exporting industry like the motor industry. In other words, it is of the greatest national importance that something should be done to see where the aircraft industry is going, what can be done in the present situation to revitalise it and, above all, to come to some conclusion as to what shape the industry can have for the future, not only to maintain employment at home, which is of the greatest importance, but also to serve the country in the export field.
In the matter of employment, although the hon. and gallant Member for Gloucestershire, South spoke about the fact that before Korea the industry was relatively small, the fact is that when men were made redundant because of the switchover from war work to peacetime activities, it was possible in those days for men to take up alternative employment. Today, however, especially with the contraction in the parallel machine tool industry, it is no longer easy for an engineer who is sacked from an aircraft firm to move into an alternative form of engineering.
1367 I conclude, not because the subject has been exhausted, but to give others the chance to speak before the debate closes. Before ending, however, I strongly support the argument advanced by the hon. and gallant Member that we should now review the possibility of encouraging, with Government assistance, some kind of substitute to the Viscount, the Britannia and Comet. What I have in mind is an aircraft to operate over the European routes, over which B.E.A. functions, with the kind of specification described by the hon. and gallant Member and with a speed of about 560 m.p.h. and carrying about 70 passengers. There is, I believe, a valuable market available for that type of aircraft, not only at home but also abroad. By the time that 1963 comes, there is likely to be a great overseas demand for it.
In the meantime, to quote the words of one of its leaders, the industry is approaching a precipice. The man who used those words said that by 1961, unless there is direct and substantial Government intervention, the whole industry may be in danger of collapse. I hope that this debate is merely a preliminary to further debates, when we may discuss the subject more exhaustively and when the Motion which we have put down may be fully gone into. Then we may find it possible to take action to save this great industry.
§ 2.44 p.m.
§ Sir Arthur Vere Harvey (Macclesfield)
I recognise that time is short and I shall try to condense my remarks into a few minutes. The hon. Member for Coventry, North (Mr. Edelman) over-simplified the whole issue. He did not make any concrete proposals for what he thought should be done. He referred to what happened before Korea. At that time, not because of the new policy on missiles, but for quite different reasons, there was a tremendous run-down of the aircraft industry and a change of mind on the part of the Labour Government. I do not blame them; it was a difficult problem. The problem existed in 1949 and only the Korean war lifted the industry out of its difficulties.
There have been far too many ups and downs in this industry for the last twenty years. They have been continuous. The men get despondent. They see their jobs disappearing because there is no con- 1368 tinuous line of thought. That is due to various reasons, including changes of design. Nevertheless, the industry did not anticipate that the present run-down would be anything like as sudden as it has been.
There have been too many delays in making decisions. I know that Ministers must get the best design prepared and specification worked out before they place the orders, but nearly eighteen months to decide on the placing of the order for the 339 is far too long. We were told in the House this week about transport aircraft. I cannot believe that there will be tremendous improvements in transport aircraft in the next year or two. I should have thought that the Government should today get together all the Ministries concerned and decide what is to happen with Government orders for the next five years and tell the industry what it will get. Then it will know the worst. Of course, there will always be amendments.
The other thing which must be done is to decide upon priorities. We do not have the same resources as America, but we have a lot of brain power. Let us use it to the best possible advantage of the country. Let us concentrate on the things that we can sell well abroad. The first of these is engines. Our engine companies are second to none. In fact, they lead the world. Many American engines today are built on British designs. The Americans do not know it, but they are. It would be wise for the Government to spend money on research and development in engines, and large sums at that.
I turn next to freighters, to transport aircraft and to the Rotodyne. Nothing has been done about this aeroplane. Attempts are being made to sell it to America and we may well lose it. Here is something on which we should spend several million pounds, if necessary, to ensure that we are leading. I would like to be told more about the specification of the civil supersonic airliner. The Times mentions it today. It is extremely important that Britain must not find herself left behind in seven or eight years' time.
To mention the firm with which I was for many years connected, although I no longer am, I know that the Handley Page Herald is being considered. I am giving away no secrets in saying that this firm has spent £3 million of its own money. 1369 It is not one of the biggest firms and it deserves some measure of Government support to overcome that first hurdle in selling it to one of the British Airways Corporations, or to the Air Force or the Navy, so that it can be sold abroad—countries want to order it—provided that it is developed in Britain.
There will be a glut of second-hand piston engined aircraft. A year or eighteen months hence, they will be practically given away. I do not think that B.O.A.C. has any possible hope of selling the D.C.7C for dollars, as we were told a few years ago. Nobody could foresee this, and the Corporation may well find these aircraft on its hands. I believe that 14 different airframe design teams is too many for this country. It is unfortunate, perhaps, that the number will have to be reduced, but we should concentrate and get the best out of the firms that remain, probably seven or eight at the very most.
The aircraft industry cannot be valued in terms of money. Exports this year will amount to about £150 million. I was bold enough to mention that figure speaking in the House ten years ago. I said that aircraft exports would reach the size of textile exports. However, in two or three years that figure may be down to £30 million or £40 million unless something is done in the immediate future.
The aircraft industry passes on to general engineering a technology which would not otherwise be available. I admire my hon. Friend for the way he tackles these problems and I beg him to impress on his right hon. Friend the need to consider the aviation problem as a whole and to try to get some sense into the situation.
§ 2.50 p.m.
§ The Parliamentary Secretary to the Ministry of Supply (Mr. W. J. Taylor)
I have no desire to bring this short debate to a premature conclusion, for I observe that some hon. Members still want to take part. However, time is limited, and I hope that the House will now allow me to reply to some of the points which have been raised.
I congratulate my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) on his contribution to the debate. The problem is big and, as the hon. 1370 Member for Coventry, North (Mr. Edelman) said, may need a great deal more time in discussion before favourable and constructive conclusions can be reached.
I sympathise with the concern of those hon. Members whose constituencies are affected by the changing circumstances in the industry, and I also appreciate the genuine concern felt by hon. Members on both sides of the House that the Government should give all proper assistance in this very difficult period for this great industry. It has made, and it will continue to make, a notable contribution to the technical and economic progress of the country. I shall devote the first pant of my speech to the general circumstances of the aircraft industry and to Government policy. After that, I hope to deal with some of the detailed points which have been made and to give such information as I can about individual projects which are of particular interest.
My right hon. Friend outlined the Government's policy in a debate on 22nd May. Nothing has happened since that date to alter the premises upon which that policy was based. The policy itself therefore remains unchanged. Many of the problems which have been mentioned this afternoon are the outcome of circumstances which were clearly foreseen and described by my right hon. Friend seven months ago and, on occasions, even earlier than that.
I want to refer to contraction to show hon. Members what is involved. We start from the unpalatable but inevitable fact that the aircraft industry's size must contract substantially over the next few years. Last May, my right hon. Friend forecast that employment in the aircraft industry over the next five years was likely to decline from 250,000 to about 150,000, which is the pre-Korean level. Those figures were mentioned by the hon. Member for Coventry, North. The forecast took account of prospective civil and military orders which could be foreseen at that time, and nothing has happened since to give us reason to amend it.
I must emphasise, however, that this does not mean that all those people will necessarily have to leave their firms and, much less, that they will be out of employment. That must depend in part on the extent to which aircraft firms diversify their activities and switch their 1371 efforts to work other than aircraft construction. My right hon. Friend and I have taken every opportunity to encourage firms to do that, and considerable progress has been made during the past year.
Although some difficulties may arise in certain localities, the decline in the aircraft industry's labour should, in general, be gradual. Past estimates of redundancy have almost always proved over-pessimistic. There is a notable case in the example of Saunders-Roe in the Isle of Wight where the result of the cancellations of the P.177 was not nearly so frightful as all of us had felt that it would be at one time.
We are in close and constant touch with my right hon. Friends the President of the Board of Trade and the Minister of Labour about the problems of the aircraft industry and, in conjunction with those Ministers, we shall continue to do everything we can to help to solve local difficulties as they arise.
§ Mr. Wedgwood Benn (Bristol, South-East)
Will the hon. Gentleman say whether he has done anything to encourage the firms who are forced to contract to deal with trade unions on a proper basis in order to minimise the dislocation in the transfers and contractions? That is a major problem in Bristol,
§ Mr. Taylor
If I said that I was never doing anything else, I should not be overstating the case. I am very conscious of the need to keep in close touch with the trade unions on all these matters and to encourage employers to give the fullest possible information to their workpeople about how things are going. We do everything we possibly can to encourage that process.
It was thus against a background of inevitable contraction that a year ago the Government considered the future of the British aircraft industry and, in particular, the future extent of Government support for it. It was concluded that there would be a need for the foreseeable future of an efficient and economic industry to meet the Services' requirements for aircraft and guided weapons. Although the White Paper of 1957 deleted from the research and development programme two projects, namely, the supersonic strategic bomber and the supersonic 1372 fighter, there are other rôles which can be carried out only by manned aircraft. My right hon. Friend announced that the Government would continue as necessary to sponsor and finance aeronautical research and development to meet defence requirements.
Furthermore, the Government intend to make a continuing contribution to civil aeronautical research and development in the ways described by my right hon. Friend on 22nd May. In reaching that decision, the Government had in mind that the aircraft industry makes an essential contribution to the economic well-being of the country. Aircraft construction is one of the most highly skilled branches of engineering and is an eminently suitable activity for a comparatively small but highly industrialised country, such as ours, with a highly skilled labour force and a wealth of technological experience.
Sales of aircraft and aero engines in the past five years or so have been of immense benefit to the balance of payments and to the general economic condition of the country. It is therefore essential that all of us should make the maximum effort to see that the industry is maintained in as highly efficient and active state as possible.
Technical progress in aircraft over the past twenty years has been remarkable and has had its repercussions throughout the whole of the engineering industry. My hon. Friend the Member for Gloucestershire, South referred to the need for concentration in stronger units. It is clear that it would be both wasteful and impracticable for the industry to maintain the present deployment of its resources over so many separate units.
Moreover, the Government expect that in the coming years the industry will bear a progressively larger share of expenditure on research and development in civil aircraft. The modern aircraft is very expensive both to develop and to produce, and some measure of concentration is essential so that the stronger units emerging will be better able to bear the heavy risks involved. My right hon. Friend has therefore declared to the industry that contracts will be placed not with the mere winner of a design competition but with greater regard to a firm or a group of firms who have the technical and financial strength to carry out 1373 development and production at the optimum rate, and to ensure that a project does not suffer setbacks unduly if something goes wrong. We welcome, therefore, such associations as that to which my hon. Friend has referred.
Reference has been made in this debate, in the debate yesterday and in an earlier debate today, to the strategic freighter. My hon. Friend referred in particular to this project, and inquired how it was getting on. There is not much that I can add at this moment to what has already been said. Many Questions have been placed upon the Order Paper, and many answers have been given, many of which have not been very illuminating. However, there are two requirements, one for a short-range tactical freighter and the other for a long- range strategic freighter, which are being considered at this moment with great urgency. In the study that is going on the relationship between military and civil freighting requirements, as mentioned by my hon. Friend, is being kept well in mind, and I have every confidence that a decision will not be long delayed.
I had intended to make reference to the position of Northern Ireland, which was mentioned in an earlier debate today, and I believe that my hon. Friend the Joint Under-Secretary of State to the Home Department indicated in that debate that I might be able to give some information this afternoon. But the time has advanced rapidly and all that I would say is that the position of Short and Harlands is constantly in our minds. We are well aware of this firm's position, and we shall take into account its resources, its mounting difficulties and the excellence of its products when we are in a position to make a decision about orders. Beyond that I do not think that I can go today.
§ Mr. John Rankin (Glasgow, Govan)
Will the hon. Gentleman steal a little moment from his time to make some reference to the position of the industry in Scotland?
§ Mr. Taylor
I had not intended to make any reference to Scotland, but the hon. Member may like to know that my right hon. Friend the Secretary of State for Scotland and myself have, during the last few days, been extremely actively engaged in matters affecting Scottish Aviation. I think that I can claim quite 1374 justly that our efforts have not been completely unsuccessful. We have been able to make some contribution, at any rate in the short-term, to solving that firm's difficulties. I see that the hon. Member for Govan (Mr. Rankin) is itching to rise to his feet. I hope that he will not press me to tell him what we have done in this matter. Perhaps he would like to consult my right hon. Friend the Secretary of State.
§ Sir Thomas Moore (Ayr)
In hope and confidence that my hon. Friend and his right hon. Friend will carry out their promises, I should like to thank him in advance on behalf of Scottish Aviation.
§ Mr. Taylor
I have always admired the assiduity with which my hon. Friend pursues these matters as they affect his constituency and Scotland in general, hut I hope that the way in which he has posed his question does not mean that he regards the answer as a foregone conclusion.
§ Mr. Taylor
It certainly is hopeful.
I was also asked by my hon. Friend about a committee for the aircraft industry. There are many subjects over the whole field of Government administration where responsibility is shared between a number of Ministers. But I do not think that a proliferation of committees is necessarily the best way of ensuring co-ordination. My hon. Friend referred to the number of Ministers who are now dealing with or are involved in these matters, and I cannot help but think that the introduction of a further committee might well complicate and delay the matter still further. My right hon. Friend has overall responsibility for the welfare of the aircraft industry, and the task of securing proper coordination between his own and other Departments concerned is placed squarely upon his shoulders. I can assure my hon. Friend that the present machinery works well, and is reviewed and adapted from time to time in the light of changing circumstances.
I now turn to the question of the supersonic airliner which has been mentioned today. My right hon. Friend and I share the anxiety which has been expressed about the need to begin to develop a supersonic civil aircraft as soon as possible, but I must remind hon. 1375 Members that this aircraft is planned to have a performance far in advance of that of any civil aircraft at present under development, either in this country or elsewhere in the world, and the technical problems which it will present will be correspondingly great. For those reasons it is essential for us to take due time to consider what is the best standard of performance to aim for before launching into the development of this project.
I can assure hon. Members that the committee of aircraft firms and officials which is engaged on the preliminary study is working with a real sense of urgency, and the research programme which they are undertaking is yielding very useful results.
§ Mr. Frank Beswick (Uxbridge)
Can the Minister say whether it is quite impossible for this supersonic airliner to have a vertical take-off capability?
§ Mr. Taylor
The hon. Member's question indicates the kind of problem with which the committee is faced. In many ways these matters probe into entirely unknown fields, and it is for the committee to consider whether it should devote its efforts in the direction in which the hon. Member has indicated or go for the conventional forward-flying aircraft. I cannot anticipate what the experts will say.
I feel that my time is more than exhausted, so I shall conclude by saying that most of the points made in the debate have been directed to the short-term problems of the aircraft industry. This is inevitable, since there can be no doubt that in the immediate future the industry faces a difficult transitional period. Nevertheless, in dealing with an industry whose products can take up to ten years to develop we must take the long view.
In the long-term, the best hope of success lies in the civil field. I am convinced that the market for both passenger and freighter transport aircraft will expand steadily and rapidly in order to meet the ever-increasing demand for air transport. In the coming years—which I should describe as years of challenging opportunity—I am convinced that the aircraft industry will meet the challenge because it is sufficiently farsighted and adaptable to make the most of its opportunities.