HC Deb 17 February 1958 vol 582 cc858-60
48. Mr. Kershaw

asked the Minister of Supply if he will make a statement on the part played by him in recent negotiations over the British European Airways jet requirement.

Mr. Aubrey Jones

Yes, Sir. In this, as in similar cases, my purpose has been to assist in meeting the needs of the Corporation, while seeing that the arrangements are consistent with the long-term strength of the aircraft industry for civil and military purposes. I have had in particular three objectives.

First, I have wished to ensure that the project would not involve financial liabilities on my Department, partly because such liabilities have been heavy in the past, partly because I think it healthier for the industry to be more self-reliant. The first proposals made by the Corporation's chosen contractor, de Havillands, required a Government financial contribution. Further proposals made on 19th December promised a private venture by dispersing the financial risk among the sub-contractors; they were, however, subject to a reservation about the volume of other work financed by my Department. Further proposals were made on 23rd January, when the formation of a group, comprising de Havillands, Hunting Aircraft, Ltd. and the Fairey Aviation Company, was proposed. Any contract will, of course, have to be carefully examined so as to ensure that my Department is as far as possible protected against contingent liability.

Secondly, I have wished to see a strengthening of units in the aircraft industry, partly so as to enhance their competitive ability overseas, partly so as to relieve their dependence on Government finance for projects beyond the present. The ideal unit would possess considerable financial, technical and production resources, and, by being part of a diversified industrial structure, would command readier access to private capital. [Interruption.] I am sorry if the Answer is long, but it is a rather important one. I have almost finished.

The sub-contracting proposals of 19th December made little contribution to this end. The proposals of 23rd January, which I welcome, represent a step forward, and contribute to a strengthening of each of the component parts of the new organisation.

Lastly, and most important of all, since the Corporation's order is, from the point of view of the contractor, an uneconomic one, I have been anxious to ensure that the arrangements made were best calculated to align the home demand with the potential foreign demand and so contribute to the maximum possible volume of export sales.

Mr. Kershaw

May I ask my right hon. Friend whether it is the case that a substantial home order is necessary in order to be able to sell the aircraft on the export market? Secondly, may I ask him if he is aware—I think he is not—that the name chosen for this new Corporation—Airco—as announced, is, in point of fact, the name owned in that sense by a constituent of mine, and that the Corporation has no right to use it?

Mr. Jones

I was not aware of the fact stated by my hon. Friend in the second part of his question. I think he had better speak to the de Havilland Company. As for the first part of his question, it is perfectly true that in the past aircraft companies in this country have exported aircraft after having first satisfied the home customer, but I think that an aircraft industry which is reliant on two Corporations, each of them with a very limited demand, is severely hampered, and I think that an attempt to overcome this restriction ought to be welcomed. For the rest, I think there must be a presumption of advantage from the point of view of exports if, before the home demand is determined, account is taken of foreign requirements. If the home demand is determined first, and then an attempt is made to export home requirements, I think the presumption is one of disadvantage to exports.

Mr. Paget

On a point of order. Is not this sequence of speeches an abuse of Question Time, and would it not be more convenient if the Minister gave notice that, owing to the unsatisfactory nature of the Question, he would raise the matter on the Motion for the Adjournment?

Mr. Speaker

I do not think the second course proposed by the hon. and learned Gentleman would be in order.

Mr. Beswick

While understanding what the Minister says about wishing to escape further financial liability, after studying the Supplementary Estimate which he is presenting tonight, may I ask the Minister if he is really satisfied that in everything he has told us he has described how these recent negotiations and all this delay have produced for this country a more efficient and larger production unit in the aircraft industry?

Mr. Jones

I think the hon. Member had better put a question to his right hon. Friend to see whether he can elicit a debate. I think I answered his question in my first statement. I think this new organisation is strengthening; it is not ideal; but the ideal is never achieved in one bound.