AIRCRAFT INDUSTRY

HC Deb 22 May 1958 vol 588 cc1498-625

3.33 p.m.

Mr. George Brown (Belper)

We are discussing today a subject of enormous importance to the country and to a whole variety of its different aspects, but a subject which, curiously, we do not seem to have discussed in any substantial way since December, 1955, or two-and-a-half years ago, which, everybody will agree, is a long enough time not to be talking about the problems connected with the supply of aircraft, the use to which they are put and the policy behind the Government's approach to this problem. It is just as well to spend a few minutes at the beginning of my speech in trying to sketch the background to the debate—that is, the changes that have occurred since we last discussed this subject.

It is staggering to think how much has changed since that time. In the first place, we have had a Report of the Select Committee of the House on the industry and on the operations of the Ministry of Supply. We have never had that Report before us for discussion and we cannot expect to go through today without some passing references to it. That Report made some considerable animadversions upon the conduct of the Ministry of Supply in those days. One cannot hold the present Minister personally responsible. It is difficult to know which Minister to hold responsible, because Ministers of Supply, like every other Defence Minister in the present Government, have been changing fast. The policy of the Department at that time was reflected upon critically by the Select Committee and it is proper that we should bear in mind what that Committee had to say.

I will not bore the Committee with a recapitulation of everything, but among other things the Select Committee found that we had spent nationally far more money than appeared, on reflection, to be good, that we had obtained far less for our money in terms of successful projects than one might reasonably have expected, and that some part of the explanation of this was that in this industry mistakes can be made; and if one is to try to do anything, mistakes will be made.

In part, however, it had happened because the relationship of the Ministry of Supply and the Defence Department with the Service Departments ordering machines and with the supplier who supplied them was not as close, as effective, or as good as it might have been. I hope that the Minister will be able to tell us what action has been taken since the Select Committee reported to put right some of the quite deserved and nonpartisan criticisms that were made by the Select Committee.

The second thing that has changed the situation in a radical way is that we have had two Defence White Papers—those of last year and of this year—which, to quote the words of the Minister of Defence in 1957, purported to introduce a completely new pattern of defence with particular reference to aeroplanes and to the part to be played by manned aircraft in the country's defences.

At the moment, we understand that that aspect is under considerable review and attack, notably by the airmen themselves and the Service advisers of the Government. We understand that relations between the Service Ministers and the Minister of Defence are not as close as we would like them to be; but for all that we know to the contrary these Defence White Papers still hold the field and, therefore, have considerably reduced the area over which the Minister of Supply now operates in his relations with the aircraft industry and have considerably affected the degree of contracts of work for manned aeroplanes available to the industry.

Thirdly, in the meantime we have had a substantial measure of contraction of the industry, of redundancy among workers and of redundancy in physical capacity which is not being used.

Fourthly, as the result of all this, as everybody knows who either has an aircraft or an aero-engine firm in his constituency, or is in touch with people in this sphere, there is a great deal of unsettlement, first, among the technicians, the young designers and the young technical people, who are very uncertain of the future of the industry in which they are working, who see things being contracted around them and who see projects being put in to keep design teams going while the future is thought out. For them, this is not a very good thing.

There is also a great deal of unsettlement among the workers, who see redundancy occurring and factories being run down. They do not know what this means for them either as workers in the industry, as workers in a particular locality or simply as engineers. As everybody will recognise, there is also a great deal of unsettlement among the managements. It does not matter which aircraft company one visits, as I have discovered for myself in the last few weeks. When talking to leaders on the management side, one finds exactly the same reaction as from the young technicians and from the trade union leaders. There is among them a great deal of uncertainty and unsettlement about their future.

It is against that background that we begin this debate, and it was against that background that the Minister of Supply last week gave the text for the debate when he made his long awaited, much postponed statement to the House on his proposals for helping the industry, for looking after basic research and generally arranging for the Government and industry to co-operate. When he announced that statement my first reaction was that he was seeking to do something for the industry but that, as I ventured to suggest, he was excessively vague about what he was doing. As the Committee will remember, it was impossible to obtain from the right hon. Gentleman any idea about what it involved in money terms. I used some words then about unlimited subsidies being offered to a free industry and the House of Commons not being put in possession of the knowledge about the extent of the financial liability that we were undertaking.

Since that day I have looked again closely at the statement, at the Minister's answers to supplementary questions in the House and at his much fuller and ampler statements at the Press conference which he gave the same night. In passing, one of the things that worries me about the Government with regard to defence is the position to which we are getting in what the Government call their public relations. Much more is finding its way into the newspapers, not accidentally but deliberately, than is coming out in the House. Frankly, I am getting worried about the precedents that are being established. I should like to give a firm warning that I regard them as questionable and uncertain and open to immediate change if the Government do not tighten up very considerably.

As I say, on that evening the Minister held a Press conference in which he was very much freer and very much fuller in the answers and comments that he gave than in the House. I have now come to the conclusion that not only was the statement excessively vague—I still think that—and was offering an unlimited new subsidy to the industry, but that the Minister succeeded in substantially concealing from the House that he was virtually offering the industry nothing at all.

In effect, the right hon. Gentleman said that the valuable national research institutions and facilities that have been built up over the years and which do such very valuable work, such as Farnborough, Bedford, the National Physical Laboratory, the Gas Turbine Research Station, and so on, would be maintained now even though much of the work that they do can no longer be given the same exclusive defence label that was given previously. I cannot see how that is to be applauded as a remarkable, bright, new constructive decision. It would have been absolute madness not to have maintained them. If the Minister had ever had any ideas of closing down these valuable institutions when we are all complaining that if there is one risk that Britain is running it is of being overleaped or by-passed by Russia, and even Germany, in technical advance, I would have been shocked, and horrified.

I have come to the conclusion, after considering the statement very carefully, that the Minister has merely said what any intelligent person would have assumed, namely, that we will continue to have this basic research at these institutions and these facilities available because, while they might help private enterprise further, they would also help the nation and have all sorts of incidental consequences of enormous value.

Having announced that we were to keep these institutions and no more, the Minister went on to make a surprising number of threats, such as that if the industry did not behave itself and did not act properly he might at some stage cut it down. I have not brought his statements with me, but they can be obtained if the Minister thinks that I am misrepresenting him. I think he said, in effect, that whether this research continues will depend on the industry itself.

I repeat that I cannot conceive anybody treating that as anything but a most irritating threat. I do not think anybody would believe that simply because some capitalists misbehave themselves the nation would deny itself some extremely valuable research institutions in this technological age. I do not believe that the threat is effective. I do not believe that anybody would regard it as a real threat. The maximum irritation is obtained for the minimum of purpose. I do not understand why the Minister thought it reasonable to put his very limited proposal into that context.

The Minister said a great deal in his statement and supplementary answers about passing the costs of these institutions over to the industry itself. Far be it from me to say that the taxpayer should pay for whatever private enterprise reasonably would be expected to pay for, since it will make some profits out of it, but is it realistic to talk about passing the costs of these institutions over to the industry? That is one of those things that is tossed out. I doubt whether it is realistic. I have spoken to quite distinguished people in the industry, not members of my party, since the Minister's statement was made, and I do not know anybody who regards it in that way.

I come to the conclusion, therefore, that the Minister's statement goes less far than any of us at the time thought. It is a minor statement on an important but very small point and he managed to make it in a way which has aroused a great deal of criticism and irritation in the industry, to add to the unsettlement that already exists.

The main criticism—and this is the basis of what I want to say—is that the Minister's statement, like all the others during the last two-and-a-half years, still fails to offer any policy within which the aircraft production industry can operate. He failed to lay out the market place within which this industry is asked to operate. I do not propose to make a particularly partisan speech, although it would be difficult for me to hide the fact that I regard the administration of this industry as disastrous.

However, it is not my purpose to concentrate on that, nor to concentrate even on bringing out all over again the weaknesses, losses, costs and difficulties in this industry. I have done that before in the House, and since the Select Committee reported we are in possession of the facts. I want to direct my remarks almost entirely to the kind of policy that ought to be available and the kind of questions to which replies are long overdue, which, I think, ought to have been in the Minister's statement and which I hope he will give today.

This industry is tremendously vital to the country. It is phenomenal that, despite all its structural and personal weaknesses, it is still a tremendously important industry. I have considered its export record. It is true that a large part of this, in the last few years, has been attracted by one aeroplane and, therefore, by one company and one design team. Nevertheless, in a little over three years the exports of the aircraft industry have almost trebled. They were over£50 million in 1954 and in the first quarter of this year they were running at the rate of£145 million. That is an enormous contribution to the prosperity and ability to live of this country.

If this has been done largely on the basis of one successful plane, what would we have achieved with three or four successful planes in that period instead of only one? Our success would have been greater still and the figures would have been staggering.

Mr. Frank Tomney (Hammersmith, North)

My right hon. Friend will get a better picture if he relates this figure to the capacity in the industry, which is 25 per cent.

Mr. Brown

My hon. Friend was a distinguished member of the Select Committee to which I have already paid, I should have thought, lavish tribute. I thought that it would be modest of me to present this picture to the Committee. I only hope that he will catch your eye later, Sir Charles, to develop the background to the Report.

It cannot be disputed that, if properly organised and directed, this industry can make an even greater contribution to our export earnings, and, therefore, our ability to live, than it is now making. It is also vital because of the contribution which can be made to our success as an aviation power. The production industry obviously has an enormous part to play in making us a successful aviation power—that is, an operating power—which in turn will have great economic and technological consequences for the country. That is clearly important, for much technological advance will result as a by-product of what is learned in dealing with the new problems.

This is also a matter of national security. There has been much argument about the use of manned fighters and manned bombers, and I am still not clear whether Air Chief Marshal Sir Dermot Boyle or the Minister of Defence is in possession of the field. Whether Sir Dermot will emerge as the new Minister of Defence when the present right hon. Gentleman takes the place of the Foreign Secretary, which is confidently expected in the summer, is something which I cannot say.

At any rate, whichever view is held about manned aircraft for national security purposes, this is an aspect of the matter which does not affect that issue, because it is concerned with the mobility and supply of the Army. I have recently read an interesting article about the air barrier between us and the Middle East, areas which we cannot over-fly and the existence of which imposes a limit on our ability to get to hot spots in time.

All that throws into clear focus the importance of mobility and of being able to move our Army and its supplies very quickly, not in seven-knot ships which take three weeks to collect together and fourteen days to arrive, as happened in a recent case of unhappy memory. That will not do in future. We cannot send men and materials in rockets, and we will have to send them in manned planes.

Whatever the argument about fighters and bombers generally, this is a contribution of the aircraft industry to national security which, if it permits us to step into an area and nip trouble in the bud, possibly moving one division with the appropriate material, will be of more value than V-bombers carrying H-bombs.

This industry, like any other industry as vital, must know the national policy which conditions its work, and must know the area within which it is to operate. Simply undertaking to maintain basic research, simply referring to the desirability of amalgamating a number of individual enterprises, is not sufficient, although those two things in themselves may be very good, and I do not criticise the latter.

I have looked up a speech which I made in December, 1955. We are all rather apt to say that we do not like reading our old speeches. I can only suggest to hon. Members that if their speeches are as good to read as mine was, they should undertake that exercise a little more often. In that debate, I used almost exactly the figures which the right hon. Gentleman used the other day when suggesting the amount of concentration needed. I do not now attack him for saying it, but it is regrettable that he should have taken two-and-a-half years—although he may observe that he was not given the opportunity of being Minister of Supply early enough—to come up to date with the Labour Party. That is no answer to the requirement for a national policy.

I therefore now ask the Minister to give us today the Government's view of national aviation policy, because there cannot be a policy simply for aircraft production. Aircraft production is only part of the general operation, the purpose of which is to fly aircraft usefully and purposefully to make money and to take people about. There must be an aviation policy in which the production of aircraft takes its place with the other sides of the problem. That is the first thing about which I hope the Minister will tell us.

The second thing concerns something about which I asked him when he made his statement last week. It is by what means he proposes to watch over the development of this policy, when he has worked it out, to try to ensure its fulfilment. I propose to address myself to those two questions and I hope to put some supplementary questions, about which the Minister has no doubt already thought, and I hope to put some ideas.

Thinking about producing aircraft and flying them takes one to the obvious conclusion that it is difficult, if not impossible, for the air Corporations and other operators to operate completely separately from the production side. The two sides have a considerable interrelationship. One of the questions which the Minister should have been asking, and on which he should now have comments to make, is whether the present relationship and the conditions of the charters under which the Corporations operate are correct for bringing about this marrying of the interests of the operating and production sides of the aviation industry.

As with every other industry, the aviation industry obviously needs a home market from which to begin operations. Producing aircraft speculatively in the hope that someone will buy them if one is not using them oneself is not likely to be a great aid to salesmanship, nor likely to attract other people.

I read this morning that the French, Germans and Italians are discussing the production of a joint specification for a new fighter interceptor and that the French are putting forward two candidates and the Italians one. I am told by people who claim to know that the specification almost exactly fits that of the S.R. 117 which we cancelled recently and then offered to the Germans, saying that although we did not intend to use it ourselves they could have it if they wanted it. Not unnaturally, they said, "Thank you very much," and refused. It now appears that the French have got what amounts to a common and considerable market.

I admit that that refers to a military aircraft and that I am dealing with civil type aircraft, but the Corporations are obviously bound to be seriously concerned with the possibility of such a market. Does the Minister think that the relations between the two sides I have mentioned are correct? In the light of experience, does he think that the conditions of the charters are correct for achieving that proper relationship?

Still thinking of this subject of building a home market on which to base the development of overseas markets, what consideration has been given to the policy toward Transport Command? I make no attack on the independent operators, many of whom I know personally, nor on the Corporations, but I doubt whether the policy of having a very small R.A.F. Transport Command, and relying on chartering when the occasion arises, is an intelligent policy, either militarily or from the point of view of seeking to provide a basic home market on which to start a drive overseas.

Would it not be better if we completely revised our approach to transportation of forces and materials and had a much expanded Transport Command, enabling that to be part of the base on which to provide a home market? Another difficulty is that we are competing with the Americans, who can provide an enormous home market every time and who can go beyond the break-even point long before they offer aircraft to other countries. That is extremely difficult for us, and it would be much better, since we are so limited, if we tried to extend the possibilities of Transport Command.

Sir Arthur Vere Harvey (Macclesfield)

This is an important matter. The right hon. Gentleman raises a fundamental point about having a large Transport Command instead of a large civil fleet. Would he not agree that if that happened we would have a large fleet in Transport Command, the Royal Air Force, which would make it very difficult to get full commercial utilisation, and instead of having 3,000 or 4,000 hours flying a year as an average, the figure would be 1,500 hours a year, which is not economically sound?

Mr. Brown

That is a commentary on what I said. I do not know whether the figure of 50 per cent. utilisation is the correct figure. One would have to have some access to information, such as the Minister has, and I should be glad if the hon. Member would discuss it with us in some detail.

I doubt whether economic utilisation will be as low as 50 per cent. The Government hope that we will get a small regular long-term Army. I personally think that the use that will have to be made of transport planes, both passenger and freight, after that happens in 1962 will be a great deal more than at present. Whether I am right or wrong about that, it seems to me that the conclusion is that we ought to have a bigger Transport Command fleet than we have now.

We could argue the economic point at which it would be silly to go further. I think that up to that point, militarily, it would be a good thing, and it would have the commercial economic advantage of giving us an addition to our basic home market because we have to have transport for the forces and transport for people for other purposes.

My third point is what kind of part does the Minister see us playing in world aviation. I have been provided with, but I will not bore the Committee with them, some most impressive statistics of the increase in flying. I forget the exact terms, but what it boils down to is that a great many more people are flying for a much longer time. Lord Douglas forecast an even more staggering advance five years ahead.

It is an enormously growing market. What part in it do we think that we ought to try to play? There is the blue riband traffic. But we do not have to have the blue riband traffic. We do not have to make that the kernel of what we do, or the main centre of our attack. We have to work out what other people can do, given the advantages that they have, and we have to decide whether it is intelligent for us to try and get in ourselves on the same level, and to what extent.

I am not presumptuous enough to suggest that I know the answers. I can think of the questions, but I think that had I been in the Minister's place I would have had the answers to them. I ask the Minister whether he has thought about these matters. If so, what conclusion has he come to. There is a mass movement of people less well paid than those who normally travel on the blue riband traffic. There are people who do not want to go to America overnight, but for whom air transport will play a very large part in going to other places. Is that a field into which we can get because it will not be so attractive for the Americans to be in at the beginning? Does it not give us a chance of finding for ourselves a special field? It seems to me that as events now stand we are almost precluded from making use of every possible field of operation because of the fare restrictions of I.A.T.A. which are against us if we get very heavily into that field. I ask the Minister whether any thought has been given to that.

These are not just civil aviation matters. This is a matter that affects very much the kind of work that we shall be asking the production industry to do. We cannot say that this is a matter for other Ministers. It is a matter for the production Ministers, too. In the same way, what about long-term credits? I am told—I must not disclose how I got to know these things—that when the President of the Board of Trade came back from South America recently he was very impressed, and let it be known that he was very impressed, with the possibility of a biggish market there for British aeroplanes.

I understand that the right hon. Gentleman was also impressed, and let it be known that he was impressed, with the fact that this was, in the case of South America, bound up with financial arrangements, and, in particular, with the size of the credits which we can offer and the period of the credits. As Mr. Nixon, of de Havillands, said the other day, this is very difficult for the industry to deal with because, among other things, of the operation of the Government's dear money policy. Therefore, it becomes very much a matter of Government policy. America is able to offer enormously long-term credits compared with ours, because their Government make it possible to do so. Have Her Majesty's Government thought about this? Has the Minister any ideas about it? Does he realise that something must be done about this?

Fourthly, may I ask the Minister how he feels we can influence the development of all this, supposing he makes a decision upon it? Many of my friends tell me that one of the outstanding things about the aircraft production industry today is that we seem to go into something which the Americans have already been doing for a year or two before we come on the scene. We find ourselves trying to get into a market which they have already got. It would be unfair of me to quote examples given to me, but I have some recent examples of where this has been happening. Does the Minister feel that it is true that we are, in fact, tending to choose markets which other people have already got? Does he not think that we ought to be looking for newer advance possibilities?

Here I would raise the curious history of the Swallow. We have all seen stories of Dr. Barnes Wallis's idea. Perhaps some of those stories were highly coloured—I would not know—but, on the face of it, it looks a very remarkable thing, with considerable possibilities for civil aviation as well as for military aviation. I understand that the Government put£1½million of public money into this project. Presumably someone in the right hon. Gentleman's Department, at a high level, thought that it was a very worthwhile idea to go into and develop this project at considerable cost. Now we are told that we have stopped it. The defence label has disappeared.

Either it was right to put£1½million into it because it is a good idea and well worth it and because of the record of the man whose name is associated with it, or it was not. If it was, why was it suddenly stopped with the loss of£1½million and left to someone else to develop the idea and use it against us? If the Minister says that this project was not very good, and that we should not have put£1½million into it, someone made a great mistake. If he says that we did not make a great mistake, and that it was a good thing to do, it must be wrong suddenly to stop it now just because the defence label is withdrawn.

I do not know Dr. Barnes Wallis—I have never met him, and I cannot express any personal opinion about him or about his idea. But I do say that it is a very curious story and a very queer situation that we have reached. I think that in this field we were offered some new, attractive and long-term ideas, and I am very puzzled about it, although I understand that the Minister of Supply has said, again at a Press conference and not in the House, that the publication of the story was a breach of security and that action may be taken. Nevertheless, since it has been published, I hope that he will be good enough to put the House of Commons into possession of as much of the facts—not of the actual invention—as he can.

Fifthly, I raise the question of freightage policy. There are obviously enormous opportunities for improving our performance as a carrying nation in the carrying of goods by air as there are in the carrying of people by air. We have a great and long tradition of being just that kind of merchant country. There is also a link-up here between military requirements—a rather convenient linkup—and civil requirements, because the military will need a very great increase in the ability to carry stores which at present cannot go by air because the planes do not exist to take them.

I still find myself absolutely staggered by the complacency of the Government in face of the fact that in 1958 we still have no replacement for the Beverley on the stocks, knowing very well that even if we took the Blackburn replacement it would be four years before it would be in service. It takes us beyond the period when we have the small Army. That is the danger point. I am not discussing whether it is big enough, or whether the numbers will be achieved, but a small Army in 1962, which I think militarily right, involves tremendous logistic problems. If we have not decided, in 1958, even to take the Blackburn replacement there will be no effective freighter transport for the Army in 1962, 1963, and a year or two afterwards.

If we take the new one—there is one being offered—it would be even longer before we got it. I cannot understand why the Government are so complacent about this, and I press the Minister very strongly on it. It may be that the R.A.F. feel that being in the Carter Paterson business is not so glamorous as being, in the fighter business. I can understand that. If that is what the airmen are thinking, the Minister might consider whether it would not be better to take Transport Command out of the hands of the R.A.F. and let us have someone in charge of the Carter Paterson business who does not mind being called Mr. Paterson.

My point is that there is a link-up between the two demands. It may be that there is the same idea in B.O.A.C. and B.E.A. as there is in the R.A.F. It may be that the heads of the Corporations do not like this Carter Paterson business, because it is a little less glamorous than carrying people about the world. If that is so, there may be nobody to do the freightage business. There must be an answer to that; possibly another body altogether. There are ways around any problems of mechanics so long as the Minister will address himself to the question of principle. I ask him what his views are about the possibility of freightage trade in the world and his views about the way to achieve it.

May I now raise what may be a very controversial issue? Suppose the Minister gives answers to all this. Who, in his view, should look after this? Here I repeat that I am raising this matter interrogatively and not committing my party or myself. I am raising an issue that it is obviously necessary to raise. Is the Ministry of Supply the right Ministry to back this industry if we are thinking in terms of aviation policy and not narrowly in terms of production policy? I have no experience of the Ministry of Supply and I cannot criticise from the inside, but I have grave doubts, as one who likes to think himself an administrator and interested in administration, whether there is any real evidence that the Ministry of Supply is the right Ministry to do this.

The business of supply is the supply of stores to Her Majesty's Forces. The Ministry of Supply has been very deliberately made by the present Prime Minister to be junior in relationship to the Ministry of Defence. The Prime Minister did that deliberately, because, obviously, he regarded the Minister as one of the four Departmental Ministers being co-ordinated or ruled over by the Minister of Defence. Aviation policy has nothing to do with that except incidentally. I have grave doubts whether it is wise to go on keeping this in the Ministry of Supply, which has a rather limited supply stores mentality. If we change that, what do we do? Nor do I see any special reason why the Ministry of Transport should be regarded as the Ministry of Aviation. I therefore raise the question whether the right thing is not to have a Ministry of Aviation, which will be responsible for production, liaison, research and, also, operations. I think that there are arguments for this and I wonder whether it should not be done.

May I put another suggestion, which may be a rather shorter-term suggestion? The Prime Minister, with a limited tenure of office before him, may be reluctant to make fundamental changes in Government machinery. It would not be sensible for him to do so. There is, however, a shorter-term proposal which could be made. What about establishing for the aviation industry a board rather like the present Iron and Steel Board? I am deliberately trying not to raise any more controversial partisan issues, but this is a suggestion which I should like to make. No doubt many of my hon. Friends will think of other ways of doing it.

Suppose we had a board rather like the present Iron and Steel Board, with the kind of powers which that Board has of collecting and disseminating information, co-ordinating activities and helping with the right kind of investment. Would it not be a good thing to set up such a board in this industry here and now to provide some mechanism through which all these things can be influenced? If we could not direct this concentration, we could influence it and try to help to bring it about. Has the Minister considered that, and what are his ideas?

This raises the question of the structure of the industry. There are some words in politics which, once they are used, bedevil all discussions because for ever after people's minds are fixed on a limited meaning to be given to those words. When we talk about the aircraft industry we immediately come to the questions, "Who will be shut down? Who will be put out of business?" This bedevils discussion.

It is no good trying to have a learned and impartial discussion with a firm which thinks that it has the best ideas existing in the industry for a new military plane, which has a very good design team but very small competitive facilities, and asking it what it thinks about the structure of the industry. It immediately sees itself being taken into the maw of some other big company just at the moment when it thinks it is about to break into the industry in a big way. This raises difficulties, and I have deliberately left it to the end of my speech rather than raise it as a principal issue at the beginning.

I said in 1955, and others said before, that we cannot successfully continue with 19 or 20 aircraft firms and half-a-dozen engine firms, or whatever the number is. The Minister has, I understand, committed himself to the view that the numbers should be four and two, whereas other people suggest five and three, but that is the sort of number which people think ought to exist.

How are we to bring this about? Obviously, there are far fewer opportunities for the Minister of Supply to do it nowadays by influencing it in the way in which he gives contracts. I was told in 1955 by the present Paymaster-General, then Minister of Supply, "You do not have to worry. We can do it when we are giving out contracts. We will influence it in that way." I know that the Government believed that that was a good way of doing it, although I never believed that it would be effective, for many practical reasons into which I need not enter now. In any case, the Minister's chances of doing it now are a good deal less, because he is giving far fewer contracts.

The whole point of the Minister's statement last week was that the military side of the industry would decline. Consequently, he will not be able to do much through contracts. For reasons which I gave at the beginning, I doubt whether he will achieve any effect, either, from the kind of threats which he made about withdrawing research facilities if firms do not do it.

Self-interest may bring some of it about, and we have recently seen a rather dramatic merger—if it is to be a merger right the way down to the design teams and production facilities. On the other hand, it might be no more than a financial arrangement at the top to make sure that when the market and the numbers were reduced both firms remained in the industry under the cover of being called one firm and both shared the work between them, which is the kind of thing we saw before the war with Richard Thomas and Baldwins, in which rationalisation was defeated by private arrangements inside the firms. If this merger did no more than that, it would not only not be a good thing but it would be a very bad thing. I do not know whether it does more than that; I do not know the people involved. Assuming that the merger is to be carried out down to the design teams and the production facilities, it is a good thing. In this way self-interest may bring some of this concentration about.

But to get more done I believe that we shall need much more active influence over events than this. We might even need direct power to effect it. Whether people think that a right and good thing, we shall certainly need much more direct influence than we have now, and I ask the Minister what ideas he has for helping this movement along and speeding it up. Here I return to my idea about a board.

I leave that subject on one side and turn as quickly as I can, with apologies for continuing for too long, to the Minister's supply function, which is not the same as the wider interest. The Select Committee was very critical of the way in which the Ministry operated its supply rôle in the supply of stores for Her Majesty's forces.. When I last spoke on the subject I ventured to say that the Ministry operated not much more than a post office into which the demanders, the askers, put their requests. I said that the Ministry saw that they were delivered and that, when the comments were returned to the Ministry, the latter saw that they were in proper form and order and, after the due amount of reasonable delay, sent them to the people who had started the operation, and so on, ad infinitum. I said that, far from being of any value, the Ministry was becoming an obstructor and was adding to the amount of obstruction. Indeed, that is what always happens when we put in a third party.

I think that the Minister must change this. If he wanted me to tell him now in what way it should be changed, I should need detailed knowledge of how it works. Personally, I share the view of those who wrote the Select Committee Report; this is an administrative matter and no principle is involved, but I believe that the Ministry should be retained for this purpose. In that case, however, it must do the job and it must be able to prevent perfection from being the enemy of the good and prevent the Services from continually wanting modifications and continually rethinking. It must be able to affect the thinking and the actions of the industry. I ask the Minister what are his views about that and how does he think that he will get continuity and proper priorities for the research work which goes on, to stop the tap from being turned on and off and prevent the programme from darting about all over the place.

These are all urgent questions. There are many others which I could mention, and no doubt right hon. and hon. Gentlemen will think of many other questions which they regard as even more important, but those which I have raised are important and urgent. Their effect on the industry and its potential and to some extent on the electronics industry—I will not go into that subject, although others may—is enormous. It is a great pity that we have gone for a long time with no statement from the Government directed to these qustions. Indeed, in his statement last week the Minister limited himself to a very small part of the field and left this part of it out.

I have two last points to make. Thinking over all these ideas and about what I feel on the subject of the Ministry of Supply as the initiator of all this work, it seems to me that this business of thinking out what the country's aviation policy ought to be will never be done by one Government Department, and certainly not by the Minister's Department now that it has been fitted so neatly into a minor place in the defence scheme.

In 1955, I suggested that we ought to have an inquiry. It is an old and cynical joke that whenever a politician cannot think up a good answer he suggests a commission. I am very conscious of that. Nevertheless, there are times when we must go outside the Government's machine, because the problem is much wider than any one Government Department can consider. In the light of what I have said about Government machinery, this is very true here. I venture to repeat my proposal that there should be an inquiry, urgently, into these problems. I recognise that it need not report over the whole field all at once; it could be given priorities.

Such an inquiry should consist of not more than five top people. They would not be representatives, but, obviously, the committee must have some knowledge of the industry, some knowledge of the Govment's machinery, some knowledge of Service requirements and civil aviation requirements and some general knowledge of working problems, as well as general knowledge of city, finance and export and trade problems. I suggest that this five-man committee ought to be set up very urgently with a powerful, disinterested but well-informed and authoritative figure as the chairman.

It so happens that in the Belper division there is a distinguished Conservative who, whenever I open a bazaar on behalf of the Labour Party, is always dragged out of his honourable retirement to open one for the Conservative Party to keep the balance right. If I put his name forward I hope that nobody will accuse me of undue impartiality.

I believe that in Lord Hives, if he is available, we have a man—I will not say that he is the only man—who would make a natural chairman of such a committee. He is a man of vast knowledge and of great drive, a very disinterested, forthright and straightforward man. I think that in him we have the natural chairman for such a body. I have not his permission to nominate him for the post, but I feel it very important to try to persuade him to do it, if the Government agree with me that this is the right method to adopt.

We dare not go on with an unplanned contraction of the industry. If we have an unplanned contraction it will produce a reaction, just as it has done in other industries. We could easily repeat in this industry the history of the motor car industry in the last few years. I can refer to the motor car industry because my hon. Friend the Member for Coventry, North (Mr. Edelman) is not in the Chamber. We could easily get into exactly the same situation in the aviation industry—a situation of vast fluctuations downwards and upwards, ending with an industry which is not related to the country's needs and not related to a desirable distribution of people.

I therefore ask the Minister to regard it as urgent to consider what I have said and to realise that he has an obligation to see that the Government take care of what redundancy arises in the capacity of the workers, whether planned or unplanned. Even if it is planned, the Government must still look after the people concerned.

We must, therefore, examine that situation. I am sure that my hon. Friend the Member for Gloucester (Mr. Diamond) and other hon. Members will do so. Let us never forget Northern Ireland in this connection. Northern Ireland is having a very unhappy time. I thought that its unemployment figure was 10 per cent. but I believe that it has now risen to 12½per cent. They have a large aircraft production establishment there and its problems have been causing everybody a great deal of worry. I will say no more on this theme, to add to my already long speech, than to say to the Minister, "You cannot ignore this. It is not an academic exercise. It is urgent and vital to look at the long-term requirements, but this part of the problem is urgent and vital now".

I am very conscious that there are many other things which I would have liked to raise, but it may be that some hon. Members think that I have raised too many points. However, I ask the Minister not to misunderstand us because we are not dividing on this subject today. Let him not misunderstand us because we have, deliberately, not made this a great Parliamentary occasion. That does not mean that we do not feel that this is not one of the most vital and one of the most important of our future prospects and that this is not one of the most important debates that we could be having. I ask him to take the matter seriously and to give us a bigger glimpse of what is in his mind than he has so far done.

I hope that hon. Members on both sides of the Committee will be able to join together in applying a very great deal of pressure to the Government on this subject.

4.30 p.m.

The Minister of Supply (Mr. Aubrey Jones)

The right hon. Gentleman the Member for Belper (Mr. G. Brown) opened his speech by alluding to two changes which have taken place since our last debate on this subject. The first change has been the publication of the Report of the Select Committee on Estimates. Since this is the first occasion for me to express my gratitude, I would pay tribute to the work done by the Select Committee. It was, from my point of view—I received the Report on first going to the Ministry—a most valuable Report.

I did not find the Report as uniformly critical of the Ministry as the right hon Gentleman tried to make out. I thought it painted a laudatory picture. There were certain criticisms—indeed, it was the duty of the Select Committee to try to point to improvements—but I do not think it would be unfair to say that the criticisms, for the most part, related to a state of affairs which was passing and which is now still further behind us. However, I shall refer to one or two of the main recommendations in the Report.

The second change has been the publication of two Defence White Papers, those of 1957 and 1958, with the consequent redundancy and, as the right hon. Gentleman said, uncertainty in the industry. I think that that is really the starting point of the debate. I should be the last one to wish to minimise the blow inflicted on the aircraft industry by the two recent Defence White Papers. It has been a severe blow. That is not to say that the industry has not had blows inflicted on it before. It has always had its ups and downs. It contracted very sharply after the last war, and then, to and behold, the Korean War came along and the industry practically doubled overnight.

I am not at all sure that that experience is not now misleading certain members of the industry. I am not at all sure that just because of this history there is not now a disposition to say "We will hang on, and everything will shortly come right again." It may be that my acquaintance with these problems is all too short—I have been at the Ministry eighteen months—but I must say that I do not share that optimism.

There are, in my view, two fundamental reasons why the aircraft industry must contract. The first is this. The Korean rearmament boom sprang from a fear of a recurrence of war on the scale and the model of the Second World War. We now know that cold war does not necessarily mean the imminence of total war; it means, more probably, long, protracted trouble, a diplomatic, military and economic struggle, in which the objective is the gradual, rather than the sudden, overthrow of the balance of power.

Granted the protracted nature of this struggle, no democratic community could, I think, sustain rearmament of the intensity of the Korean rearmament boom. That may be a sad fact—I think it is a sad fact—but it is none the less a fact, and I think that is one reason why the aircraft industry faces an inevitable contraction.

The second reason is that the manned aircraft in certain applications—not all; I will come to that matter in a moment—is giving way to the unmanned missile, and, as far as the aircraft industry is concerned, the unmanned missile does not employ as many people as the manned aircraft. Therefore, on both counts I think that a contraction is inevitable.

Indeed, I would estimate that over the next two or three years the reduction in Government expenditure on aircraft will be just under 10 per cent. a year, shall we say 9 per cent. Correspondingly, I would estimate employment in the aircraft industry over the next five years as declining from 250,000, the present level, to 150,000, which is the pre-Korean level. I do not think that this need necessarily mean the departure from their firms of those displaced from work on aircraft, because that depends on the extent to which the firms now engaged in aircraft work can extend their activities into fields other than aircraft work. Clearly, the more that is done the better it will be.

Nevertheless, I think that these figures confront us with a very formidable problem. There is a difficult problem of readjustment. There is a question here. I imagine that it is the question to which hon. Members will wish to address themselves today, and it was fundamentally the question asked by the right hon. Gentleman. It is, "How can we best ease this transition? What can we do to ensure that the adjustment is on the right lines so that the industry, though it must inevitably be smaller, none the less has a sure future before it?"

As the right hon. Gentleman alluded to the recent conference and showed a degree of misunderstanding about it, I would, first, assert categorically that there will be a future for military aircraft and that there will still be a need for an aircraft industry to produce military weapons. It will still, of course, be needed to produce guided weapons, but it will also be needed, I suggest—without any suspicion of disagreeing with my right hon. Friend the Minister of Defence—for manned military aircraft.

In the debate on the Defence White Paper on 16th April, 1957, my right hon. Friend said: … there will still remain a very wide variety of rôles for which manned aircraft will continue to be needed."—[OFFICIAL REPORT. 16th April, 1957; Vol. 568, c. 1764.] I believe that confusion has arisen in this way——

Mr. Frank Beswick (Uxbridge)

Before the right hon. Gentleman leaves that point, has he informed the industry what these rôles are and what aircraft will be needed?

Mr. Jones

I would ask the hon. Gentleman to exercise some patience. I am trying to explain.

What the White Paper of 1957 did was to delete from the research and development programme two projects—a supersonic strategic bomber and a supersonic fighter. The bomber was deleted because by the time it was likely to come into operation it was likely to be too vulnerable to a guided weapon defence, and, what was more, it was unlikely to come into being significantly earlier than the ballistic missile. The fighter was cancelled on the ground that the speeds required for interception in the middle 1960s were such that they could be more effectively achieved by the unmanned weapon.

But this did not mean to say that no further military aircraft would be needed. While it is sometimes said that generals, in preparing for the next war, think solely in terms of the last war, I think that the readers of the 1957 White Paper have thought of air warfare primarily in terms of the main air battle of the last war, the air battle over these islands. In that context it is true to say that the manned aircraft is giving place to the unmanned missile.

However, there are other contexts. There is the whole context of limited war. In a limited war the attack will be directed against opportunity targets, and they will have to be slower attacks, which are more suited to manned aircraft. Equally, the defence will be much more suited to manned aircraft. There is the tactical rôle. There is support for ground troops. There is the reconnaissance rôle. For all these we shall still continue to need, and need from a British aircraft industry, manned military aircraft. Lastly, there is the transport rôle, which is really a civil rôle, but, clearly, it is very important for defence purposes. I think that what we have to do at this juncture of the industry's affairs is to try to build up the transport rôle.

I agree with many of the arguments put forward by the right hon. Gentleman to show the importance of the aircraft industry. It is of great economic importance. However, I am not sure that the main importance that I would ascribe to it is not an intangible one, one which cannot be measured, and that is its technological importance. I believe that there is a growing need, not only in this country but in the whole of the Western world, for quicker technological progress and that we are in great danger of slipping behind Soviet Russia.

I do not believe that technological progress is best achieved by an even spreading of the few technologists that we have over the wide field of industry. I think it is best achieved by concentrating our technological efforts on one or two main fields, which then act as leaders to the rest. I believe that the aircraft industry has played this leading rôle. The art of constructing aircraft is the most difficult and the most challenging form of the engineers' art, and as a result the whole of our engineering industry has been fertilised and benefited. It would be a tremendous pity if that were lost. We must, therefore, have an aircraft industry.

As to the rôle which we ourselves, as a country, might play in the field of transport aircraft—the right hon. Gentleman asked me to answer this question-I would say, without endeavouring to be precise, that as we see other powerful countries, the United States and Soviet Russia, entering on the exploration of space travel, it is just possible that their energies will be so absorbed in space travel exploration that their attention will be deflected from more humdrum things in the field of air transport. [HON. MEMBERS: "Oh."] It is possible.

Mr. Ian Mikardo (Reading)

Do not rely on that.

Mr. Jones

I am not relying on it, but no country can do everything, and I am not sure that there is not scope for us there.

For the rest, I think it is significant that this country pioneered the propeller-turbined aircraft, and at the existing levels of world affairs the propeller-turbine aircraft shows possibly greater profits than any other kind of aircraft. If world air traffic is to be expanded, clearly it must be on the basis of low fares. I think, therefore, that we have something of promise.

The right hon. Gentleman concluded his speech by asking that the Government should set up an inquiry into this question and related questions. This is not a novel idea. Many eminent people have called for an inquiry. Indeed, last summer and last autumn the air was thick with calls for an inquiry. However, I think many of the questions he posed call for a determination by Government of the proper priorities with which it is confronted and how it is to choose between them. Outside inquiries have their uses, but they cannot determine for a Government how to choose between several choices open to it.

It was for this reason that the Government agreed to set up not an external but an internal inquiry, consisting of officials from the many Departments inevitably touched by the question of aircraft. Whilst I understand the right hon. Gentleman's craving for some great centre of Government dealing with the whole of aviation, I honestly think that if he came seriously to examine the question, he would find that it would not be practicable. Anyhow this internal inquiry was set up and it is still not completed. For that reason I am inevitably inhibited in answering some of the right hon. Gentleman's questions today. Some conclusions have been reached as a result of the inquiry, other matters are still being studied. The best thing I can do is to describe those conclusions which have been reached, and touch upon some of the problems that are still under examination.

The first question is the pattern of the industry, and here I do not find myself in fundamental disagreement with the right hon. Gentleman. We have in this country fourteen major airframe firms. We have five major aero-engine firms. In the United States they have a fewer number. I would not like to cite the American number categorically, but I think I am right in saying that with a much larger market there the number of major firms is smaller. Whether that be so or not, I think we are faced here with a reduction in the number of firms.

The right hon. Gentleman imputed to me words which I have never used. He suggested that I said there ought to be only three or four airframe firms and two aero-engine firms. I have never used such authoritarian language. What I have said is that the volume of business, as I can foresee it in the light of the estimates available to me, is not such that it will sustain more than three or four major airframe firms and two major aero-engine firms.

Mr. Mikardo

There is not much difference.

Mr. Jones

There is all the difference between that and authoritarianism.

Mr. Mikardo

That is wishful thinking.

Mr. Jones

No, it is an estimate which is appropriate to a free society.

Mr. John Diamond (Gloucester)

Does not the right hon. Gentleman agree that his first statement, namely, what he called the authoritarian one, might result in getting something done, whereas from his second statement it is reasonable to assume that nothing will happen?

Mr. Mikardo

Nothing will happen in any case.

Mr. Jones

The hon. Gentleman had better exercise a little patience, and we shall see. Granted that the increased volume of business cannot be spread economically over the existing number of units, which must be fewer, I also think that the individual unit has to be a strong one. If the average British firm is to compete effectively with its American competitor, it must have sufficient technical resources to ensure a quick translation from the design, through the development stage, to production. I also think it must be financially strong, because only a financially strong firm can undertake the tremendous amount of speculative investment which is inevitable in this industry.

The hon. Gentleman the Member for Gloucester (Mr. Diamond), echoing the speech of his right hon. Friend the Member for Belper, called by implication for a reduction in the number of units and the strengthening of the individual unit through planning. I do not exclude here a rôle for the Government, and I will mention in a moment what I think is the appropriate rôle. What is needed is a strengthening of the individual firm. No strengthening can be imported from above. It may be helped from above, but it cannot be imported. Genuine strength is ultimately only to be acquired by the industry itself.

I do not think—possibly I am less optimistic in this regard than the right hon. Gentleman the Member for Belper—that a reduction in the number of units and a strengthening of the individual firm will come about if the industry is left entirely to itself.

Mr. G. Brown

I did not say it would.

Mr. Jones

I am sorry if I am misrepresenting the right hon. Gentleman, but free individuals are very much like free nations when confronted with the suggestion that they should unite and strike up an alliance. They will all say in the abstract that they agree it is highly desirable, but there is then reluctance to see any abatement of sovereignty. We see that in regard to Western European Union. In the case of an aircraft industry left entirely to itself, I think there would be a disposition for each firm to hang back, trying to get the best terms for itself, and hanging back to a point where it might jeopardise its own future prospects as well as the future prospects of other firms.

Therefore, I am not a laissez fairist. I think that the proper answer here is something intermediate between full Government authority and complete laissez faire. What we need is a combination of impulse from above compelling the assumption of responsibility on the part of the industry itself.

Mr. Diamond

How can it be done?

Mr. Jones

I suggested certain methods in this direction last autumn. This was the main burden of the report of the Select Committee on Estimates. What I did last autumn was to intimate to the industry that henceforth contracts would be placed not with the mere winner of a design competition but with a firm which showed something in addition to good design. It had to show a technical ability to move quickly through development to production. It had also to show a degree of financial strength to ensure that the project did not suffer setbacks unduly if something went wrong.

In other words, I established a criterion. The ideal standard for an aircraft firm is one which is engaged in both military aircraft and civil aircraft, and, indeed, in other things too, so that it raises its capital on the basis of its entire diversified structure. That is the standard, and in the placing of guided weapon contracts as well as manned military aircraft contracts, that is the criterion which should be observed. The contracts will go to those best able to match the standard.

There is precedent for this. Other industries had this problem in the interwar years—iron and steel and shipbuilding. In retrospect, I think it would be fair to say that they accomplished quite an effective degree of rationalisation, and they effected it in this way. The Bank of England was the giver of capital necessary for any re-equipment. The Bank stipulated a standard. It specified that unless there was reorganisation the capital would not be forthcoming. The Bank did not do the reorganising. That responsibility was left to the industry, but the Bank set a criterion and the industry had to match it. That is really what I have done here, I have exercised the power not of capital but of contracts, and I take a more optimistic view of contracts in the light of my views on the technical rôle of manned military aircraft which differ from those of the right hon. Gentleman.

At this juncture, I want to enter one caveat. On this question of amalgamation and integration, I have sometimes heard the phrase "shot-gun marriages". I am glad that I cannot claim any over-familiarity with the institution of shot-gun marriages. As I understand it, a shotgun marriage is one in which a particular bridegroom is made to marry a particular bride.

Mr. Diamond

For a particular reason.

Mr. Jones

I have never found that it was for me to indicate that A should marry B, I am much too conscious of the perils inherent in that. However, I have felt it my duty to establish the criterion. How the criterion is met is something which the industry has to work out for itself.

So much for the pattern of the industry. The next important question is that of research and development. I was interested to observe an abrupt volte face in the attitude of the right hon. Gentleman today from his attitude the other day when I made my statement. The other day I was accused of being lavish with unending subsidies. Today, if I understood the right hon. Gentleman aright, I am accused of being mean and curmudgeonly. The answer probably lies between the two.

It is probably the case, I am not sure, that much more is spent on research in this industry in relation to turnover than in any other. The greater part of research, however, has always been done by the Government. Some research has been done by firms at their own expense, but by far the greater part has been done under Government auspices, and not only inside Government establishments. In addition, the Government has placed research contracts with firms and has also placed contracts with firms for the building of research aircraft. The main purpose of the research has always been military, but the research undertaken for military purposes has always been of tremendous indirect benefit to the civil aircraft.

Mr. Mikardo

Oh.

Mr. Jones

A large part. It is impossible to put a figure to that value, and no payment has ever been asked for it. None the less that benefit has been there. The research for military purposes will go on, as it is bound to do, and much of it will still be of value to the civil side of the industry. This is the essential point: the coming of the guided weapon means that some research still essential for civil aircraft may no longer necessarily be performed for the military aircraft and the question is, what is to happen to this research? This is the question to which the Government had to address itself. The industry is not equipped to undertake this research, for the simple reason that the scale on which it is necessary is beyond the capacity of any individual firm. Neither do I think the industry at the moment is in a position to finance this research, quite apart from its execution. Yet not to undertake it would mean, in effect, that the industry would be, deprived of its future.

The position then which the Government have taken is that as a Government it will continue to carry responsibility for this research and will do it in the same way as before, partly in Government establishments, partly by way of research contracts, partly by way of contracts for the construction of research aircraft. As the research for military aircraft subsides, so research still necessary for civil purposes will be carried on, recognising now that it is done for the civil end. This was the essence of the decision I announced the other day. I am sorry that the right hon. Gentleman takes a poor view of it, but I think it was the decision the industry was looking for. I think it was the decision which essentially the industry wanted. I will leave it at that.

Then, the right hon. Gentleman asked me about the Swallow aircraft, and I will try to respond to his invitation and give the facts about it, in so far as I am the master of them. In fact, the question has intrigued me ever since I came to the Ministry of Supply, and I hope I shall never be accused of being without sympathy for the unorthodox. I think that perhaps I am a little unorthodox myself and that perhaps I have a little too much sympathy with the unorthodox. I am also conscious that in any large institution, particularly a Government Department, there is a danger that the brilliant and the eccentric idea may be stifled. I hope I shall always be one who will pay due attention to the unconventional idea which conies from the outside.

The problem with which I found myself confronted on this question of the Swallow aircraft was this. Research had been going on into the whole subject of variable geometry—an aircraft capable of varying its shape while in flight—for the best part of ten years. A research contract had been placed by the Ministry of Supply with Messrs. Vickers, and, in addition, certain work was undertaken within the Royal Aircraft Establishment at Farnborough. The time had come—in fact, it was long overdue—when it was highly desirable to move beyond fundamental research to the construction of an actual research aircraft. Accordingly, I invited Messrs. Vickers to submit proposals, and their proposals came to me on the very eve of the Defence White Paper of 1957.

The proposals were for the construction of a research aircraft which might prove the foundation for a bomber to succeed the supersonic bomber; in other words, it was a research aircraft which might be the foundation for a post-supersonic bomber.

Mr. Tomney

Another ten years.

Mr. Jones

I would not like to place a time on it.

The supersonic bomber has been cancelled for perfectly valid reasons which are given in the Defence White Paper. Accordingly, I informed Messrs. Vickers that the proposal in the form in which they had couched it could no longer rank high on the list of priorities, but I added that the Ministry of Supply was still extremely interested in the whole principle of variable geometry and invited the company to submit alternative proposals, proposals which would apply the principle in a different form, a form different from that of the supersonic bomber, and proposals which would be less costly than the proposals originally submitted, and, not least important, which offered practical guarantees of successful completion. That was the invitation I extended to them.

Since then, certain alternative proposals have been received, and the latest of them is now currently being examined in conjunction with the Americans. It may well be that the Americans may feel disposed to grant Mutual Aid for the project. I do not know. At the moment, there is joint consideration of the proposal with a view to a joint arrangement under which the Americans would make their contribution under Mutual Aid.

I cannot prophesy at the moment what the outcome of that study will be. I would only say that the test which has to be applied to the proposal is the obvious one of practicality. I am perfectly prepared to make obeisance to the geniuses, but I think that geniuses must occasionally recognise that they strain the wishes of their best friends if they remain persistently scornful of the practical. So much for the Swallow aircraft.

Next, on development; I think that, although the right hon. Gentleman did not talk about development, there has been some confusion between research and development in the statement I made the other day. By development, I mean the carrying through to the prototype stage of an aircraft which is ultimately to be produced in some numbers. On the morrow of the war, we found ourselves without any transport aircraft. We had left the whole field of transport aircraft during the war to the Americans. We then decided to come back in it, and the Government financed the development of all transport aircraft projects. I am not sure that that statement is quite as generous as it sounds, because in exchange for the contribution the Government subsequently demanded a levy on all sales of the aircraft to customers other than Her Majesty's Government. In other words, it was a kind of investment, and if that investment was successful, as it was in the case of the Viscount, a handsome profit was made, or, if the aircraft was not successful, the investment was lost.

Over the last year, the new projects undertaken by the companies have been undertaken without any promise of a Government contribution. The companies have undertaken to finance the development themselves. There are some who think that this was too hard on the industry and that the Government still ought to contribute to the development. I do not share that view, for two reasons.

First, I think that an industry which is too dependent and is seen to be too dependent on public finance will lose even its most genuine friends, and I think that in fact the aircraft industry was in danger of losing its friends. Secondly, I believe that an industry which is too dependent on public finance will always be reluctant to assume the responsibility of strengthening itself. Some strengthening of the aircraft industry must come from the assumption of responsibility by the industry itself.

On the other hand, I am prepared to recognise that it would be wrong to saddle the industry with too much. That is why, in the statement I made the other day, I made an exception of aircraft embodying quite revolutionary designs. If there is an aircraft embodying a quite epoch-making design, its development may be extremely costly, and it may be quite out of the question without a degree of Government support. In other words, the policy is to nudge or edge the industry to a greater degree of self-reliance but without, however, the Government refraining from extending aid where it is genuinely needed.

The right hon. Gentleman also asked me questions about export facilities, and I am prepared to concede immediately that this is the most important question facing the industry. I think there are probably two sides to it. There is, first of all, the length of time for which the Export Credit Guarantees Department extends its insurance. In this country, the maximum period for the insurance is five years, but I understand that the American companies receive from the Export-Import Bank insurance extending over seven years.

Mr. Tomney

At lower terms.

Mr. Jones

I grant that. This is a subject currently being examined and I am not in a position to announce any conclusion. It is being examined as sympathetically as possible, subject to two inevitable limitations. Clearly, the Export Credits Guarantees Department is required by statute to pay its way, and must be inhibited to some extent by certain international agreements. However, the subject is being looked at.

Sir A. V. Harvey

Is my right hon. Friend aware that this matter has been known now for at least a year? While the Government are examining the matter, good business is being lost. Will he give the House some assurance that the matter will be dealt with expeditiously in order to put the British industry on an equal footing with its competitors?

Mr. Jones

I am not at all sure that business is currently being lost. After all, De Havillands secured very good orders for the Comet the other day.

Sir A. V. Harvey

What about the T.E.A.L.?

Mr. Jones

The difficulty there was quite a different one—the difficulty that the American companies entered into an arrangement, which was not entirely new indeed, it goes back to Aladdin—of trading new aircraft for old.

Mr. Mikardo

Aladdin was not an American.

Mr. Jones

No, he was not an American, but the practice has a very long history.

There is nothing inherently unfair in companies trading new aircraft for old, and if a generous price is paid for the old aircraft it is very difficult to say that it is unfair, for the simple reason that a second-hand aircraft cannot have a recognisable market price. That interjection points to the real difficulty. The difficulty is not so much the terms offered by the Export Credits Guarantees Department, but the greater financial strength of American companies vis-à-vis the British companies. This is something we have to look at, and again we have to recognise that the Government can make but a limited contribution to strengthening an individual company in the financial sense. That is something which the company really must perform itself.

Mr. Beswick

Perhaps it would be convenient if the right hon. Gentleman could answer one question now. I had intended to raise this matter about the Teal contract. Are we to understand from the Minister that the Government, who assure us that they are very interested in Commonwealth trade, are leaving the matter where it is and that no effort is being made at the highest level to do something about this contract, which was originally recommended for a British firm and has since been set aside at the instigation of the Australian Government?

Mr. Jones

No, Sir. The Government are not disinterested in this, and certain action has been taken. I only ask the hon. Gentleman to recognise that there are limits to the extent to which aircraft can be forced on what are, after all, autonomous airlines.

Lastly, the right hon. Gentleman asked me some fundamental questions, and very interesting questions, about the customers in the domestic market for British aircraft. There are, substantially, just three customers. There is B.O.A.C., with a demand for long-range aircraft; B.E.A., with a demand for short-range aircraft; and there is Transport Command. Each has a demand which in itself is uneconomic, and even if in fact the demands happened to coincide, the total demand when added up would still be uneconomic. In other words, there is no economic demand for British aircraft within this country, and, however much Transport Command is expanded, so long as that expansion is a realistic one I do not see a fundamental remedy for this problem.

I think that in this respect the aircraft industry is probably unique. I know of no other example of an industry which finds the domestic market for its products uneconomic under existing arrangements. Each of its customers has a duty and is free to serve its own interests. The right hon. Gentleman raised the question whether there should not be a change. I think that if there were to be a change, he would have to face up to the fact that any change would require compulsion upon the customers to serve the interests of the British aircraft industry. That would be a most fundamental and revolutionary change indeed, and I think that there are very few who would be prepared to advocate it.

The proper thing is to continue with the existing arrangements but to ask that the customers, granted this uneconomic nature of their demands, should voluntarily recognise their responsibilities. They carry a far greater responsibility than the customers of any other industry, and it is upon them that depends whether we ultimately make or mar this industry.

It has been common ground between the right hon. Gentleman and myself that we both wish to save the industry. If there is a difference between us it is this, that he thinks that salvation can come entirely from above, whereas I think some action is needed from above but that some response is also necessary from below. The members of this industry themselves must think long and they must think large, and the customers themselves must think long and large, too. Only if they both do that in addition to action by the Government can we ensure a future for the industry.

5.16 p.m.

Dr. Horace King (Southampton, Itchen)

After those two very important speeches by my right hon. Friend the Member for Belper (Mr. G. Brown) and the Minister of Supply, I want very briefly to state the anxieties of the workers in south Hampshire. Hampshire has a splendid record in aircraft development and great designers. The Spitfire of Mitchell was designed in Southampton and a tremendous amount of important research and development has gone on in Hampshire since the war. There are 3,000 workers at Hollands in the little town of Hamble who are economically entirely dependent on the aircraft industry, and workers in Christchurch, Hurstleigh, Bournemouth, and the Isle of Wight are also concerned. All those are areas in which the aircraft industry means much.

In the Isle of Wight the industry was almost wiped out recently. The industry has disappeared from Hurstleigh and the Minister's statement this afternoon, which confirmed the previous figure which he gave, showed that the industry faces a cut of 100,000 workers and, much more serious, a cut of 40 per cent. of the strength of the industry. I make my plea to the Government on behalf of Hampshire.

If this cut takes place, thousands of Hampshire folk will be put out of work. We need the active and eager co-operation of the Government in providing other forms of work for the highly-skilled labour involved. There is a second oil refinery project to which the Government could give encouragement; dry dock facilities wanted at Southampton could be given encouragement and, above all, unlike what he said this afternoon, the Minister must do what he can to encourage the aircraft industry to use factories already at its disposal for work other than aircraft production.

There are two matters of detail to which I want to refer. It was put to me by the Association of Draughtsmen that when its members lose their jobs in the aircraft industry and seek employment elsewhere, they do not receive the benefits normally provided under resettlement schemes. I was told that an aircraft draughtsman who moved from Hampshire to Coventry and who had set up home in the South found that the cost of the transfer involved about one year's salary. I ask the Minister to consider making it possible for the highly-skilled technicians in the industry who go elsewhere to seek work to have some kind of benefit from the resettlement scheme.

The other point which the draughtsmen asked me to put was whether the Minister could apply the principle of the designation of special areas if there was a shortage of work for highly professional labour. When the Government are considering allocating labour, could not they bear in mind the fact that when the highly-skilled professional men in the aircraft industry find themselves out of work they need work of that kind sent to the area?

It is obvious that shrinkage is inevitable and that what we want is planned shrinkage. The Minister said how much it is to be and I hope that the country will satisfy itself that it does not embark on a plan to shrink the aircraft industry more than is economically desirable. The fear of many is that if the shrinkage is left to private enterprise alone, it may produce the maximum hardship in some parts of the country and may mean that some of the great aircraft companies will entirely scrap some of their ancillary organisations leaving the group of workers in that area high and dry. I know that that is what people in Hampshire fear at present.

I urge the Government to take an interest in the whole problem of the redeployment of workers in the industry. This is a British rather than an aircraft matter and, if we are not careful, it will involve a waste of talent and skill. It is idle to expand our provision for technical education if at the same time, by sheer carelessness, we allow the skill of technicians and technologists to go to waste because the aircraft industry is allowed to shrink.

I urge the Minister not to jeopardise the future of this great industry. In Hampshire we are proud of what Hampshire has done for the industry, but much more proud of what the British aircraft industry itself has achieved. I hope that in the interests of rationalisation and scaling down we will not risk infinitely greater waste in cutting down the industry.

I urge the Minister to consider the anxieties of the 100,000 highly-skilled men whom he is to displace from the industry and who have a contribution to make to Britain, a contribution which should not be wasted one hour more than necessary.

5.22 p.m.

Sir Arthur Vere Harvey (Macclesfield)

I agree with most of what the right hon. Gentleman the Member for Belper (Mr. G. Brown) said, but he asked me to elaborate on my point of view about his suggestion that more should be done about allocating aircraft to Transport Command. I think that he has got it wrong. The effect of such an allocation, even with the small Army which the right hon. Gentleman envisaged, would certainly mean that there would not be enough work to give the utilisation which is achieved by the major airlines. The large airlines are getting about 4,000 flying hours a year, flying 18 hours out of the 24.

Mr. Beswick

indicated dissent.

Sir A. V. Harvey

The hon. Member shakes his head, but I was in Australia two years ago when a company was flying a D.C.4 for 4,000 hours a year and the aircraft had already completed 40,000 hours total flying with A.N.A. The figures are available and if the hon. Member checks with some of the airlines he will see that the average figure is well over 3,500 hours a year.

With the way that the R.A.F. inevitably runs its services, no flying at weekends, and so on, all of which is understandable, it could not compete with civil airlines. The other point is that by allocating aircraft to Transport Command the aircraft could not be used commercially against foreign companies, so we should lose foreign currency earnings. I agree that an adequate Transport Command is needed, but the right hon. Gentleman's approach is wrong. Transport aircraft might be better arranged if they were within the Corporations or independent companies, or both, and available for emergency.

I was interested in what the right hon. Gentleman had to say about Lord Hives, since I made exactly the same suggestion last December, so the right hon. Gentleman was not original in that. I do not know whether Lord Hives would agree to do this work, but he would be an admirable man for advice as an elder statesman on aviation matters. Quite apart from experts, we need a committee or board to discuss and advise on these matters. Aviation is too complicated for Ministers and civil servants, with the amount of work which they have to do from day 10 day, to be able to advise on what ought to be done.

I hope that my right hon. Friend was not serious when he made his surprising reference to the possibility that because of the great interest in making satellites the Americans might not be so interested in aircraft, so that we might get into their markets. I assure him that if he has any idea of competition from the Americans falling off for that reason, he could not be more wrong. The Americans will not neglect their aircraft industry. To believe that we will not have to face tremendous competition from them is nothing but wishful thinking.

In some respects, the debate is timely and necessary. I feel that this industry has had a difficult time over the last forty years and it is perhaps as well, without wearying the Committee, to review what has happened. The industry's effort before and during the last war was tremendous. Management and workers did a superb job for a country of this size and undoubtedly saved Britain, and possibly the world, with the aircraft and equipment which they handed to the Royal Air Force and the Allies.

It is very easy for we Parliamentarians, seeing an industry in difficulty, to come here and make speeches and suggest how things should be put right. It is quite another story when, with limited funds and a rundown, one has to find the answer. The problems in the industry are enormous and I hope that nothing I say this afternoon will exacerbate the situation.

After the First World War, the Royal Air Force and the industry underwent a tremendous rundown and a number of firms went into other industries, such as making motor cars, while many others got into serious financial difficulties, some going bankrupt. Not until the late 1920s did a reorganisation gradually take place and the famous firms which we know today emerge as leaders of the industry.

With the rising of the Axis Powers, the industry got going in the early 1930s, and here I pay tribute to the planning staff at the Air Ministry who worked out the requirement for the eight-gun fighter as early as 1932, so that we were to see the Hurricanes and Spitfires six or eight years later. They did the job for which they were built. Tremendous thought was put into their design and it was largely due to men like my right hon. Friend the Member for Woodford (Sir W. Churchill) and the late Lord Trenchard, and a few others, that we became an air Power in the 1930s. But for them, we should not have had an Air Force worth talking about. Those planes came in the nick of time and we were very short of the Spitfires, although a few came along to save the day.

By the end of the last war, about 1½million people were employed in the industry and in ancillary trades. A steady rundown took place, as was to be expected, immediately after the war. The Labour Party, then in power, placed far too many orders for different types of aircraft. As a result, we had many failures, because, not being strong enough to say that it was too busy and could not undertake the work, the industry did not have adequate wind tunnel and other facilities, but accepted the orders. It was not entirely the industry's fault. It was pressed by the Government and various Ministries to undertake work which it was told was of national importance.

During those early years, the mistake which was made was in not tying the military requirements for aircraft to the civil requirements. Even later, had the Britannia gone into Transport Command before going to civil airline use, that would have been better for all concerned. After the war there was complete neglect in that respect. There was a shortage of wind tunnels and, as we know, models were used for supersonic flight experiments in Cornwall. No real courage was shown.

The party opposite must accept some responsibility for this, and I will explain why. In 1948 and 1949 the Labour Government cut the contracts tremendously. I remember that the Hastings contract for transport aircraft was halved. Had that aircraft been produced in the numbers required, the story of Abadan might have been quite different. The Government probably thought that they were right in acting as they did, but they were wrong, because when the Korean War began the industry had been run down. It had lost its stress-men, draughtsmen and technicians. They had gone into the motor car industry, and we had great difficulty in getting them back to make the aircraft required as quickly as possible. Men fight shy of that sort of thing. They ask what security there is in the industry. It was very difficult to persuade them to come back.

In addition to the orders placed here, orders worth millions of dollars were placed in the United States for machine tools, for which there is practically no use today. The whole thing was completely overdone. The firm that I was connected with was given a contract for Canberras, and was asked to make 30 a month. Eventually that figure dwindled down to four a month, and then the order was halved. The party opposite lost its head over the Korean situation.

Mr. Mikardo

I agree with every word that the hon. Member is saying at the moment. I have been listening to him with very great interest. But I recall that a handful of members of my party in 1951, in the rearmament debate, said what the hon. Member is saying now. At that time we were thought of as the lunatic fringe and we got no support from the hon. Member or his hon. Friends.

Sir A. V. Harvey

The hon. Member cannot get away with it like that. His party placed the orders, and it is well known that when the Conservative Government came to power, in 1951, they halved the orders for Canberras. They were quite unnecessary.

Mr. Mikardo

The hon. Member is a Bevanite—six years too late.

Sir A. V. Harvey

Whatever the hon. Member says, the orders for Canberra bombers were halved.

Just over a year ago the Minister of Defence issued his White Paper. That represented the crossroads for the industry. I think that my right hon. Friend went too far. I do not want to get on to defence matters, but they have a bearing upon the aircraft industry, because at least 50 per cent. of its products are military. Unless we face the problems which we may run into in the manufacture of guided missiles this country may be left without adequate modern manned aircraft in four or five years' time.

It is the most difficult thing in the world to get the required information from the prototypes of guided missiles. With supersonic fighters there is instrumentation, and the pilots and observers come back with full information, but in the case of guided missiles it is a very difficult and much more complicated story. I have no doubt that the missiles will be made to work over a period of time, but I think that the Government have underestimated the time it will take to perfect them.

In 1957, the manufacturing and repair sections of the industry employed about 330,000 people. Today, the figure is 250,000, and it must undoubtedly run down more than that—probably by another 60,000 or even 80,000. If the industry is to survive—and my right hon. Friend has said that it is vital to the country that it should—money must be provided in the right way, so that the proper research and development may be carried out. We shall not produce anything unless research and development take place beforehand. No firm today can afford to go to town on its own in research and development. Vickers are doing it with the V.C. 10, and if it went wrong it might mean disaster for that firm, although I am fairly confident that nothing will go wrong. It has the experience and background to make a tremendous show.

I thought that my right hon. Friend's recent statement on research and development was a rather woolly one. I would like to see something more decisive. He should tell the industry what he means to do with the money, and how it is to be spent. His statement had many reservations, and was not sufficiently specific. He referred to achievements, but the industry cannot bring about achievements unless research and development is carried out beforehand.

This afternoon my right hon. Friend referred to the fact that other industries benefit as a result of the achievements of the aircraft industry. That is so. I know of one aircraft company which tendered on the open market for the design for certain equipment for an atomic power plant, and it was successful because it had the necessary technique and brains in its organisation.

There is a great deal of argument going on in many quarters as to whether it is vital to have supersonic bombers or civil aircraft. It is easy to say that it is not necessary to perfect a supersonic aircraft for civil purposes, and that the V-bombers will do their job and with guided weapons and that we need not worry, but things happen so quickly in this industry that nobody can say what will happen in ten years' time. I ask my right hon. Friend not to be too certain that supersonic aircraft are not wanted. A committee is studying the question now, but that is not enough. The Americans are doing a great deal of work on the subject, as are the Russians. Can we be told tonight, therefore, what is being done about supersonic aircraft, whether for military or civilian use? It is not merely a question of the airframe; special engines have to be developed for the purpose. I hope that my right hon. Friend can give us more information.

Can my right hon. Friend also tell us the ratio between the money spent on aircraft and on missiles? I do not think that enough money is being spent on aircraft. We have the V-bombers coming along, but what is being done about a long-range fighter? I know that the V-bomber can carry a stand-off weapon, and that it can launch its weapon 600 or even 800 miles from its target, but is there a rôle for the long-range fighter? Is the point being investigated? It should be.

The Venom fighter is doing a wonderful job of work at Aden; it is accurate in placing its rockets where they are required. The Hunter would not be so suitable. Is any thought being given to the development of an aircraft to replace the Venom in the type of local war which, although we do not want to see it, we are bound to have from time to time?

I am very disappointed with the Ministry of Supply. I have been for years—and I have made no secret about it. I am not reproaching my right hon. Friend, but I do not think that the Ministry can play its full part with its present organisation. I should like to give an example of what I mean. The firm with which I was once connected decided to make a civil aeroplane to replace the Dakota Today. 650 Dakotas are in airline use, spread out all over the world. This firm has spent about£2 million of its own money on the Herald. It is now obtaining a certificate of airworthiness, and the aircraft is flying very well. Apart from a little support, in the shape of the wind tunnel facilities at Farnborough, it has had no real help. This is beyond my comprehension, when Fokkers, who are building the only real competitor, have orders from their Government. It is not possible to sell an aeroplane abroad today unless initial orders have been placed in one's own country.

Mr. Aubrey Jones

My hon. Friend is depreciating the part which the Ministry of Supply has played in the development of the Herald. It received very extensive technical help from the Ministry of Supply Research Establishment, both in the experimental sphere and in testing. The problem is to find orders. The Ministry is not a finder of orders. We come back to the point I made in my speech. It is the responsibility of the customers. That is the difficulty.

Sir A. V. Harvey

I said that the aircraft had received assistance from Farnborough, in the shape of wind tunnel research and help, but that does not go nearly far enough.

If the Government want Britain to export aircraft they must face the fact that aircraft will not be sold abroad unless a home order can be secured which will give confidence to foreign buyers. There is a possible market in the replacement of half the 700 Dakotas, and we should be able to see the Fokker company off, because its aircraft has British engines, and between 50 per cent. and 70 per cent. of its components are British. We have all the necessary facilities available in this country.

If my right hon. Friend wants to know what to do, I can tell him that he should place a contract—which he can get out out at a future date—for two or even four aircraft. If that were done I am sure that contracts would follow—not only for aircraft, but for spares—for ten years afterwards. If he does not do this a great responsibility will rest upon his shoulders if the market is lost.

I no longer have any financial interest or responsibility in these matters, but I have seen this situation coming about. Each Department has passed on the responsibility, and in the long run nothing has been done. That is not good enough. I happen to know that when the President of the Board of Trade was in South America he went out of his way to give assistance, and I am hoping that something will happen as a result. If it does, it will be a tremendous show-up for the Minister of Supply.

What is being done about direct lift aircraft? These things look very amateurish today, but I should like to know whether anything is being done about the Rotodyne and laminar flow. Within the next few years these developments could put Britain well ahead of any other country. We are entitled to a little more information about these developments. They could revolutionise civil aviation. In laminar flow air is sucked through holes in the wing, and it would put up performance by 40 per cent. For an expenditure of£1 million we might possibly earn hundreds of millions of pounds in the years to come.

My right hon. Friend referred to the contract with the New Zealand and Australian Governments in connection with Tasman Empire Airlines. Both Governments recommended the Comet as a suitable aircraft, but the Australian Government then stepped in and said, "No, it has to be the Lockheed Electro". I can understand the feelings of the people in New Zealand today, after their difficulties in selling their dairy produce to Britain. I am not blaming the Government for that, but I would mention that New Zealanders have been very loyal to Britain and they would like to place this order with Britain.

The position is, however, that Qantas Airlines are prepared to use some of these Electro aircraft on their own routes, and Qantas, in addition to T.E.A.L., fly between Australia and New Zealand and New Zealand and Fiji. Is it not too late for the Government to send a Minister out there to do something about getting this contract away from the Americans? It is not good enough to say that the Americans are offering to buy back old aircraft at a good price. That is a concealed subsidy. It is the equivalent of extending American credit to fifteen to twenty years.

The Prime Minister is very interested in aviation matters, and during the last two or three years he has done much good. His recent tour of the Commonwealth was also a help in this direction. Cannot he get the Commonwealth countries together so that we can have a concerted civil aviation policy, and really pull together? In turn, we should say that we will do all we can to help Commonwealth countries in regard to their own products. A great opportunity is available if my right hon. Friend will seize it.

It will be disastrous if we allow these Australian and New Zealand contracts to pass into American hands. In the past, I have tried to obtain contracts while competing against the Americans, and I know the difficulties. It is no good uttering platitudes and sending polite cables; something dramatic and realistic must be done if we are to bring this business back to Britain.

Let us not think that the Americans are all that good; they are not. They have, however, a habit of concealing their problems and difficulties. Without wearying the Committee, I would like to read a paragraph published in Aviation Week, an American publication, of the opinion now held in that country on the Wright engine which powers Super Constellations, D.C.7.C.'s, Convairs, etc. It says: Turbo-Compound's 'dismal' record: Wright turbo-compound is the target of mounting criticism from airline and engineering officials, who charge that the engine's record of premature failures and frequent removals falls short of their standards needed for airline performance. The engine has become the subject of bitter criticism from airline maintenance and engineering personnel, who are forced to maintain reliable schedules in the face of what one airline vice-president termed a 'dismal' engine record. This sort of thing is going on in America all the time.

Had this been a British engine, such as the Britannia, that has given a certain amount of trouble, we should never have heard the end of it. Every newspaper would have reported every single engine failure. We ought to talk more about our own achievements. We have many. The Government ought to give information about them, and the industry ought to help itself more.

I was disappointed with the Minister's speech this afternoon. Something is wrong. I want to see a different approach to all these matters in Government circles. It has been rightly said that exports are running at about£130 million a year. I predicted that figure six or seven years ago and I was laughed at by many people outside the House. Aeroplane exports could replace many great industries which are on the way out. They are far the best weapon for selling brains and materials, far better than the motor car and other such products. We have a great opportunity. If the aeroplane industry is allowed to run down we shall never be able to put it together again, ever. It is our last chance. I beg my right hon. Friend to pursue this matter with his colleagues in the Government and get busy on doing something about it.

5.47 p.m.

Mr. John Diamond (Gloucester)

I welcome what has just been said by the hon. Member for Macclesfield (Sir A. V. Harvey) in his closing sentences, and I share the view of this industry that he has expressed. A good deal of what he said was very acceptable to hon. Members on these benches. I agree with him that this is a timely debate, if only to clarify the extremely inadequate and vague statement that was made here compared with the much fuller statement made to the Press only a short time ago.

Now that I find myself addressing this Committee for the first time on matters relating to the aircraft industry, I feel like asking for the indulgence of the Committee and congratulating myself that the Chamber is in a rather placid mood. I acknowledge straight away a strong constituency interest. I represent a city in which there are 15,000 people employed in the aeroplane industry and in which every fourth working man or woman is employed in that industry. Famous makes of aeroplane have been made in my constituency; there is the Gloster Javelin and various famous types associated with the name of Hawker. For the first time since before the war there is fear of unemployment in my constituency based on the fact that the number of unemployed is now for the first time greater than the number of vacancies, because the vacancies have been reduced. The reason for that is that the aircraft industry is withdrawing its requirements. We therefore come immediately to the connection between the fear of unemployment and the position in the industry.

Having acknowledged a constituency interest, let me add what I think the real interests of my constituents are. They are identical with the interests of the constituents of other hon. Members; they are that there should be, coupled with security, a continuing fall in armaments. In the course of time the resources of this industry should be diverted into making things for civilian rather than military purposes. That is another way of saying that men and materials should be put to work for peace rather than for war. There is nothing inconsistent between that and saying that it is in the interests of my constituents that they should be kept at work.

There is no logic in the argument that if, as the result of a run-down in armaments and defence policy, we have to reduce the military aircraft industry, we should have to suffer large scale unemployment. We do that only if we fail to recognise that this is a very real problem to be faced and that it is in the interests of everybody that it should be faced. Let us examine the problem and consider how to deal with it.

The problem is one of falling demand for aircraft. The contraction in the industry nobody can be precise about, but it is roughly 50 per cent. of those engaged. There is also the problem of unemployed resources in plant, premises, factory equipment, and so on, and they are all of vital importance at a time when productivity is static or falling and is bound to fall even more when productive capacity is not used. These unemployed resources are of enormous importance, but there is also a question of research workers. It is on the quality of the research worker and on the attractiveness to him of this industry that development depends, because out of it ideas arise and the country is enabled to make progress.

We all agree that there is need for an aircraft industry, but it is clear, despite the Minister's well-known courtesy and careful choice of words, that there are differing views on the subject of military aircraft. We have to bear in mind that even the most powerful Ministers can be wrong from time to time. Perhaps the Minister of Supply would not mind inviting the Minister of Defence to go for a walk in the country one day and to look at the trees. He will notice that there are supple trees which, when the gale of public opinion blows upon them, bend and give way, but return to the upright for another day. There are also solid trees that are as firm as a rock but if a gale blows sufficiently hard they are blown completely over and uprooted. It is to be hoped that no Minister of Supply will jettison all possibility of restoring the aircraft industry so that manned aircraft can be made, should they be needed in the future.

This debate has been brought about as the result of a statement by the Minister which has not been clarified by his speech this afternoon. That statement was presented in the vaguest possible terms. It was, as usual, that the Government were prepared to go a little way but not far enough. The statement shows that the Government have made up their mind to go a little way but much too late. Everything said this afternoon has carefully avoided anything that could offend anybody in the industry. The Minister spoke for a long time and said almost nothing at all. That is not the way to help forward either the aircraft industry or unemployment within the industry. Neither is it the proper way to relieve the very natural and real anxiety of all who work in it. What the Minister has said boils down to this, that we are to continue research as before. It does not make a policy at all.

We welcome the fact that research expenditure is to continue. At present some of this expenditure is being borne by private firms. There is no indication of the means of achieving co-operation between the research of individual firms engaged on civilian aircraft and research on military aircraft. We cannot afford overlapping in these matters because there are not sufficient able men for all these purposes. We must concentrate the brains and not disperse them. We must use them efficiently and not duplicate their efforts in other directions. We have not had a word about this aspect of the matter although we might have imagined it would arise out of this statement. It indicates that the Minister might have started out with some modern and progressive ideas—we know that he is capable of them from time to time—but, by the time the statement had been approved by the Cabinet, they had all been removed and we were left with "business as before".

How are we to provide for the sharing of their research discoveries by private firms? No private firm with any intelli- gence, when there is a shortage of work and not enough orders to go round, will share its discoveries with some competitor so that its own chances are reduced. No one in his senses will allow that to happen in a private enterprise firm. That is the position in this industry; there is not enough work to go round. There is barely 50 per cent. How is this to be overcome? How are we to ensure that private firms, in the interests of the nation and not of individual firms, share their research discoveries?

The right hon. Gentleman did not say how we were to ensure that all the best brains would be attracted to research as a result of having a solid, long-term programme. At the moment people are leaving research work at an enormous rate. I am sure I shall be excused for giving some details. I refer first in general terms to the information that was made available in The Times a short time ago about the number of research graduates in science going to North America. I am told that for every 100 physicists leaving our universities with post-graduate degrees ten go across the Atlantic and remain there. That is a most unsatisfactory state of affairs and we have some responsibility for it in the aircraft industry. Are the Government aware of it, and are they doing anything about it?

Are the Government so organising the work for the aircraft industry that there will be attractive, long-term employment for the best brains this country produces? After all, it is on brains that our future depends. The way in which workers are leaving this country is not a one-sided affair. I wish the Government had done something to publicise the facts about conditions on the other side of the Atlantic. The Minister will correct me if I am wrong, but I am told that during the last nine months, up to the end of March, at least 100,000 have had to leave the aircraft industry in America. I am told that in California alone the number employed has fallen by 42,000 in that same period. Do the Government accept responsibility? If so, have they done anything about it by drawing the attention of those willing to go to California in search of better paid jobs to the possibility that they may find themselves out of work very shortly and joining unemployment queues over there?

The Minister does not take the same view as I do about his responsibilities. He takes a much more limited view. His statement on research was inadequate in many respects. He did not tell us how he was to provide for appropriate consultation before research contracts were to be placed or about research undertaken in Government Departments. Who is to judge? If research is to be cut down, obviously it is vital that priority in research should be clearly established.

Mr. Aubrey Jones

The whole implication of what I said, both in my statement the other day and my speech today, was that the broad volume of aeronautical research is not being cut down.

Mr. Diamond

I am delighted to hear that it is not being cut down. Certainly it is fair to say that in his statement the right hon. Gentleman said that there would be the same kind of expenditure, not to be disclosed, but, whatever it was, it was to continue into the future.

Mr. Jones

I think the hon. Member is confusing money spent on fundamental aeronautical research, which roughly would remain unchanged—as the military side declines the civil side is taking its place—with the broad Government orders from the aircraft industry for production and development. On contracts for production and development, as distinct from research, the contraction is of the order of 9 per cent. a year.

Mr. Diamond

It would be an easy matter to confuse those two things, and if I confused them I apologise immediately, but actually I do not think I did. I am referring to research expenditure which the Minister said would continue at the same level. I apologise for having said earlier that if expenditure is to be reduced it is all the more important that priority should be determined. Expenditure continuing at the same rate makes it still of the greatest importance that priorities should be determined.

The point is that there was nothing in the statement of the Minister to indicate what method of consultation was to be applied before deciding into what kind of research that same amount of expenditure was to be put. Presumably, in five years' time the same amount is to be spent in doing exactly the same things, but who will have to decide on what things? Who will the Minister consult about that? Presumably he will consult consumers, manufacturers and representatives of labour, but he does not say any of those things. We do not know on what basis these decisions are to be made. The fact that they are to be made by one central authority makes it all the more important that consultation in the fullest sense should take place.

The Minister did not say a word about what I might call the follow-up of this expenditure. Having the responsibility for the expenditure, surely he has to see that the money is wisely spent. I speak now both of research and development. Particularly in the field of development contracts, what form is he to adopt to achieve that? We are getting into a very difficult situation. The Minister said that he looked forward to a time when there will be four or five aircraft frame manufacturers and two aircraft engine manufacturers. The method which the Minister allows himself in apportioning development contracts is not to give contracts to those who do not toe the line, those who do not satisfy him because of their structure, or in one way or another. If there are two firms making aircraft engines and in his purely negative approach he decides not to allow one firm to supply him this year under a particular contract because he does not like the way that firm behaved last year, then next year he will have only one firm left.

How is he to control that firm in this negative approach, and how can this approach be satisfactory with the "enormous latitude" of two firms to deal with? I am not arguing that there should not be two firms, but the right hon. Gentleman is afraid of the logic of his argument. His argument shows that there will be a reduction in the number of firms and also that he has Ministerial responsibility. He must tell the Committee how it is to be exercised. He cannot do so because he has not thought it out, or, if he has, it is not in a form acceptable to him or probably to hon. Members opposite.

There are problems to face when a subsidy of this kind is given. Let us call a spade a spade: development expenditure paid by the Government for the benefit of a particular private enterprise firm is a subsidy. There are many economic arguments against a subsidy. It tends to produce inefficiency in the firms or in the industry in question. It tends to produce extravagance and sometimes incompetence. We have heard nothing from the Government about how that is to be avoided. I am not saying that a subsidy of this kind should not exist. It is inevitable that it will have to exist, but the Government have not gone on to the next stage of saying what their proposals are to avoid the unsatisfactory results which might flow from this kind of policy.

How is the right hon. Gentleman to get the reduction in numbers which he desires? He claimed some credit for something which happened recently, but I do not think he can claim great credit for this. He made great speeches about not allotting contracts unless there was the right sort of organisation and concentration, but very little has happened as a result. I should have thought he should not bring that forward as an argument in favour of his success but rather the reverse. I regard it, as The Times article did, as the failure of his efforts in that matter.

I should like to put forward some suggestions about the expansion of the aircraft industry and its diversification. I was very much interested in what the hon. Member for Macclesfield said. It indicated that Governments do not understand the need for salesmanship when getting contracts for aircraft. It is beyond my knowledge whether our firms understand the need for salesmanship, but America knows how to sell. Are we prepared to adopt their very full and plentiful methods of salesmanship? The Government could lend a hand in many ways. I support what the hon. Member for Macclesfield said, not with reference to a particular firm, as I have no knowledge of that particular firm, but in a general way.

I should like to know what intervention the Government have made to secure N.A.T.O. contracts for this country. There are such contracts. Who is to get them? Have this Government made every possible endeavour to secure them for us? What have the Government done in contemplation of the Common Market? There will be contracts going and the needs will be varied. That is not today, but nor are aircraft planned and made in a day. One has to be prepared to enter in a commercial way. So far as I can see, the Government have said nothing about it and I do not know whether they have done anything about it.

I rest the major part of my criticism on the lack of diversification. It is no use the Minister telling me that this is a problem for the industry itself. I take the view that if the industry is to be encouraged and if the Minister is not able to achieve his will, he should tell the House. We offer him several suggestions on how these rôles could be achieved. I have been astonished by a new generation which has grown up. When I say to them, "What is a Messerschmidt?" they immediately reply "A car". When I say "What is a Heinkel?" they do not all know, but those who answer again say that it is a car. Not once have I had a different answer, but many of us in this Committee have other pictures in our minds when Messerschmidts and Heinkels are mentioned.

That is a story of diversification elsewhere. Why are we not diversifying here, turning our swords into ploughshares and Javelins into bubble cars, or whatever may be needed? This is a very important aspect of the matter because we are most interested in the proposition that work should be brought to the workers. That is of great benefit to the worker, to the community, to employers and to the wealth of the nation, because all equipment and facilities should be kept in full use.

I am told that it would be very simple to change the production in an aircraft works from aircraft to the production of nuclear power plant. I am not technical in this respect, but I am told that it would also be simple to go in for the manufacture of electronic computers, which are in great demand. I am told that transfer machines are in great demand and that 95 per cent. of them are imported from abroad. They could be made in this country with a very small change of approach and without enormous investment, but nothing has been done about all these things.

The comparative results are staggering. In my constituency there are two large aircraft factories almost adjoining one another. One is Armstrong Siddeley, and it has virtually no unemployment problem. One reason is to be found in the advertisement in The Times a short time ago in which Armstrong Siddeley said Armstrong Siddeley are proud to announce the completion of a licence agreement to manufacture the famous Maybach diesel engines which are to be used in connection with the electrification and development of the railways in the south-western area. This meets the country's needs and solves the Government's problems in railway wage disputes, by increasing productivity.

The neighbouring case is that of a firm where about 1,200 people have left in the course of the last fifteen months. The firm has given as the reason, not knowing its future. It made a statement about future employment requirements in connection with a conference on work in the area. A statement had been made three months before, and on this occasion the firm apologised for the fact that the position was as obscure as three months earlier. The statement said, I am very sorry that this statement has to be so vague, but the number of unknowns make any realistic prediction impossible. The unknowns were, of course, in connection with orders for military aircraft from the Government.

It is not surprising in these circumstances that we in Gloucester should be worried about the future. All who are interested in the aircraft industry should be highly concerned; and I am sure every member of the Committee takes the view that this is a vital industry to the prosperity of the nation.

We want to see a strong, progressive and prosperous industry but the Minister and the Government are apparently prepared to do very little towards that end. Their philosophy is not the same as ours. If there is any industry where their philosophy does not work, it is the aircraft industry, which is an industry which has to be looked after, helped and co-ordinated and, as is now shown, controlled.

Nothing that the Minister said this afternoon has shown that he is willing to take the necessary steps to achieve what he said should be done. It is no use making these air-fairy statements unless he tells us how the objective is to be achieved. That is my complaint. If he is short of ideas, let him ask us on this side of the Committee. I should be glad to give him any amount of advice and ideas which would enable the industry to thrive in the way I have indicated.

6.18 p.m.

Mr. William Shepherd (Cheadle)

Had I wanted to be unkind, I might have replied to the hon. Member for Gloucester (Mr. Diamond), who accused the Minister of talking a long time to say nothing, by saying that he had spoken for even longer. I appreciate his difficulty, however, which is that of many hon. Members this afternoon. They find themselves having to sustain a constituency interest. I do not complain about that, because I have one. I have in my constituency the Woodford factory of A. V. Roe, which employs 10,000 people and is one of the most formidable set-ups in the country.

I appreciate the difficulty, therefore, but I also appreciate that we must have some regard for the interest of the community at large and for the taxpayer, and I have heard very little reflection of that interest this afternoon. It seems that most hon. Members have been anxious to pursue their personal, private interests or their constituency interests, with very little regard to the wider implications of their proposals.

I want to strike new ground and to say that I wholeheartedly support the Minister of Supply in his statement. Indeed, I have only one regret about his statement, and it is that it was not made at least five years ago. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite may say "Hear, hear," but their hand in this situation has been badly played and they have nothing on which to commend themselves.

When I say that I wish the statement had been made four or five years ago, I mean that if we had had such a drastic change four or five years ago this industry would be in a very much healthier state today than it is and many of the boats which been missed would not have been missed. No one can look at the present picture of the aircraft industry objectively and feel that we are in other than a very difficult position.

The right hon. Member for Belper (Mr. G. Brown) said that he had been told that many projects which we were starting were behind those already progressed by other nations, and that is lamentably true. Many of the projects which ought to have been started a long time ago have been kept hanging about because manufacturers wanted Government support for them. If one has a benign Government in the background willing to back one financially, then one is not inclined to get on one's own feet and do it.

Had we made it clear to manufacturers four or five years ago that no Government support would be forthcoming, I believe that many projects which have been postponed would by now have been well on their way. I believe that the Handley Page project mentioned by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) would have been on its way a long time ago had there not been some expectation that Government finance would be forthcoming for it. Had the Government made it demonstrably clear five years ago that there would be no financing of that project, the company concerned would have done it for itself, instead of which it hung on to the project in the hope that the Government might supply the finance.

Do not let us simply condemn the industry in its entirety in this country. The fact is that the whole of the aircraft manufacturing industry, when added together, is a piece of nonsense. Let us look at it globally. At the moment 895 projects of some size are being put forward in the world and being progressed in some form or another; an attempt is being made to make 895 different aircraft. Of those 895, it is questionable whether more than a hundred will ever see a reasonable level of production, and the great majority will never see any production at all.

This is not an industry. It is a wild, futile, nationalistic scramble by various nations, all saying, "We must outdo the other fellow. We cannot be under him. If he does it, we must do it." Hundreds of thousands of millions of pounds of public money have been poured down the drain throughout the world in an attempt to produce aircraft which in the main will never be produced.

If we are attempting in this country to set our house in order, we must therefore recognise that it is only a part of a general pattern and that it does not subject our own industry to any special criticism. The aircraft industry is of vital importance. It is not merely important for itself, although the production of aircraft is obviously important to us, but it is also the leading industry in terms of engineering. If we lose our place in aircraft engineering, then we lose our place in the world of engineering generally, because the aircraft engineering industry is always ahead in terms of progress and is the leader in the field. We must not lose that position in the world of engineering.

While we must make changes, therefore, we must always bear in mind that this is an important industry and that we must keep ahead in it. Indeed, I believe that if we carry out the policy which the Minister of Supply has stated, we shall get much further ahead than we have been in the past. We have dropped behind in the past eight or nine years not because we have tried to do too little but because we have tried to do too much.

Undoubtedly the villain of the piece is not entirely hon. Members opposite, who have played a minor part. The villain has been the Korean War. If one could re-write the economic history of the world without the Korean War, what a wonderful change there would be in the world. Just at a crucial time, when our economies throughout the world were settling down to a not unreasonable level, we had this great flare-up. It certainly distorted the pattern of our aircraft industry in a distressing way.

The reason that we have not done as well as we ought to have done is that we have been attempting to do too much. If we are satisfied about that, and if that is accepted, then I cannot understand why hon. Members on both sides of the Committee object to the amount being cut down. If it is admitted that trying to do too much and trying to tackle too many projects at once has been our failing, why is there this resistance when my right hon. Friend tries to cut down? I should have thought that it was the natural consequence of reaching that conclusion.

I believe that if we cut down we shall improve our position. Although there are 10,000 people in my constituency involved in the industry, I readily accept the need for contraction, and I do not think we ought to object to contraction. Indeed, I object to some extent to what the Minister said about diversifying the industry. I am not at all happy about the industry being diversified. Perhaps I may explain why. The aircraft industry is a very specialised activity, and unless one is living in that industry and putting everything into it, one cannot possibly keep ahead.

If each of the companies in the industry were to say, "We do not want to go out of existence and we will start to make perambulators, bicycles, lawn mowers and motor-cars and will diversify our range of activity", I am convinced that we should become that much less specialised and efficient in aircraft manufacture.

It is unpleasant to say to a firm, "You must close down". I am by no means unmindful of the wide social consequences of doing so. Nevertheless, I do not want to see firms in the aircraft industry taking on a great many additional and extraneous types of work which will detract their attention from the job of making aircraft. If we are to compete with the United States, who are substantial competitors, we must be on this ball, playing it night and day. If we do not do that we shall fall behind those who are specialising in the production of aircraft.

We have five major concerns in this country employing 40,000 to 50,000 people each. I agree that it is possible for very big concerns to have a division of their activities which will bring to aircraft manufacture sufficient force and specialisation, even though they are not concerned entirely with aircraft production. In the smaller works, employing 10,000 people and fewer, I am satisfied that it would be a disaster if firms tried to diversify their activities and to undertake the manufacture of aircraft as a sideline. It is much better that they should try to go to some entirely different class of work.

There is one rule which I hope we shall enforce, as far as we can enforce anything: I hope that we do not again see manufacturers making both airframes and engines. I have been plugging this for six or seven years, but it is essential to ensure that at last it is realised. The manufacture of airframes and the manufacture of engines are two highly specialised businesses. In the United States, where they have enormous production, no firm thinks of making engines and aircraft, for the obvious reason that to do so means that a firm loses its flexibility. A firm is inclined to modify the airframe to suit the engine according to the current state of affairs in the organisation. If a firm makes only airframes or engines it can use the wide choice offered without attempting to modify its own requirements.

Firms in America which started to make engines and airframes are, one by one, abandoning the policy and are reverting to specialised manufacture. I hope that we will not only get our numbers down but will make certain that we do not have the manufacture of airframes and engines together.

I want to say a few words about amalgamations as they affect research and development, because I have been rather worried about what has been happening. I should not be at all happy if firms got together and said, "We will amalgamate and then there will be reconstruction of the industry", if they merely meant that they would amalgamate financially. After all, one must realise that in a large concern research and development staff constitutes 20 per cent. of the total staff employed. It amounts to at least 33⅓ per cent. of the weekly wage bill. If a firm, with the best intentions, but in my view unsoundly, tries to amalgamate and keep two research and development staffs going, it will be on the road to disaster. It may end up by losing the business of both firms.

Today, when there is a need to produce more competitively, one cannot afford to keep running two research and development organisations. Moreover, one cannot ignore the fact that if two firms come together and the two research and development staffs know that there is not room in the business for both, there will be friction between the personnel of both organisations, which may well be damaging to the technical progress of that concern. I hope that when these amalgamations occur they will be very real ones and not merely for financial reasons, because that will be no good at all.

May I say a word about the need to produce aircraft at low prices? It is a curious thing that wherever aircraft are produced and whatever the rates of wages, the prices come out more or less the same. I know that there are reasons for this. The Americans get a break-even figure of about 120 or 200 aircraft, whereas we get a break-even figure of about 60, which makes a difference, despite the fact that our wage bill is about one-third or less of that of the Americans.

We should produce aircraft more economically than we are producing them. If the aircraft industry is to grow we must have cheaper aircraft and cheaper flying. There is no hope for further development in the industry unless flying becomes much more popular than it is today. It is not popular today because only the people who travel on business account and at holiday time can afford to go by air. When we reach the day when people can afford to pay for their ticket we shall have big business in this field. Therefore, it is necessary that we should reduce fares. That means that we must have aircraft that are made at low cost and which can be maintained at a low cost. We are capable of doing that.

I hope that we shall try to keep in existence our turbo-props. Unless the Ministry of Civil Aviation does something about it, our turbo-props will have a very short life, whereas they ought to enjoy a very long life because they are a very economical and, I think, pleasant aircraft in which to fly. I hope that a special effort will be made to save the life of the turbo-prop. If it is merely, for the purpose of fares, jumbled in with the category of the pure jet, it will certainly lose its place in the world.

I should now like to say a word about the selling of aircraft. I thought the Minister's statement on this point was less satisfactory than it was in other directions. He may have been in difficulty in that he had to consult the Chancellor on that point, but nevertheless we ought to try to impress upon him the difficulties which are facing manufacturers in selling aircraft.

I heard the other day about what was happening to the Lockheed Electra. I understand that the makers of this aircraft go round to operators and say, "If you take this aircraft, you can have it for two years on hire. At the end of the two years, you can decide whether you want to buy it. If at the end of two years you want to buy it, you can set off the amount, that you have paid for the two years hire as a deposit against the aircraft and pay the balance over seven years". If one were to try to sell, as Vickers are doing, an aircraft competitive with the Electra on ordinary straight five-year terms one would find those methods of selling, to say the least, rather discouraging. In view of the fact that almost every aircraft operating company in the world is almost stone-broke and cannot find the money for the aircraft that it has already acquired, these effective and attractive terms are a tremendous discouragement to our people.

I hope that my right hon. Friend will weigh in to the Chancellor and ensure that our manufacturers are permitted to offer terms at least as satisfactory as those offered by our American competitors. I know that we do not want to enter into a race with the Americans by selling on credit terms, because they can probably beat us in that sphere, but I do not want to see our workmen producing first-class aircraft like the Vanguard and the VC.10 and being unable to sell them because of the better credit terms offered by the Americans.

As a consequence of what is being done today, I hope we shall have a better aircraft manufacturing industry than we have had in the past ten years. We can have. There is no question, as one hon. Member said, about cutting down research. The Minister is perfectly clear and logical on this point. I cannot understand why people fail to appreciate it. [Interruption.] The hon. Member seems to be in the same difficulty, and, if I may, I will try to spell it out in simple words.

What does my right hon. Friend the Minister of Supply say about the manufacture of and research into aircraft? He says that he intends to continue basic research into aircraft problems on present lines. He says that he expects the research and development which is to be done by firms to be paid for largely by themselves; but he makes the important qualification that where a new generation of aircraft is concerned he will consider giving assistance for research and development. This is terribly important, and I hope the Committee will appreciate it. We have reached a certain stage now in aeronautics and the construction of aircraft. The present generation of aircraft should be built from the fund of existing knowledge, but if in future we develop a supersonic civil aircraft, which must happen, or an entirely new generation of aircraft, then my right hon. Friend says that he will consider giving assistance.

The hon. Member for Gloucester asked some silly questions of the Minister, such as, "What will the conditions be? Are you going to do this or that? To whom are you going to give or not to give?" We are not yet facing those problems. We do not know what the structure of the industry will be when the new generation of aircraft is conceived. Until we know that a new generation of aircraft is to be created, my right hon. Friend would not only be extraordinarily silly, but could not lay down the specific terms, regulations and conditions upon which he would grant such assistance.

Mr. Diamond

Will the hon. Gentleman give way? The hon. Member is being slightly less courteous to me than usual. However, how will the Minister achieve what he wants to achieve if he does not place any conditions on the grants that he proposes to make? Is it not equally consistent with what the Minister was saying, namely, that he does not know where he is going?

Mr. Shepherd

No. If I may return the hon. Member's backhanded compliment, I think he is being less clear than usual. He is not being fair to my right hon. Friend.

I will try to explain the position as I see it. My right hon. Friend has made it clear that he wants to see a contraction in the industry. An automatic reduction in the orders for military aircraft will bring about that contraction. There is no doubt about that. He has said that he will look to the firms themselves to do the research and development, or at any rate the development upon civil projects of this generation. He could leave it, without any guidance whatever, to the industry. He could say, "I propose to cut down the orders and there can be a wild scramble for what is left and the devil take the hindmost." If he said or assumed that, he would be wrong. He has sought to give guidance to the industry. He cannot tell them what they ought to do exactly.

Mr. Mikardo

Why not?

Mr. Shepherd

Because they are privately-owned concerns and have a right to determine their own future. They might even be able to get for themselves a much better future than even the Minister visualises. Therefore, my right hon. Friend cannot tell these people what they should do.

He has indicated—and this is the proper thing for him to do—the broad lines on which he thinks the industry ought to run in the next five or ten years.

Sir A. V. Harvey

Would my hon. Friend explain what he means by "the next generation"? The VC.10 and others are being built. That carries us on another five or six years. Has the industry to wait until they are completed? At present, we can see nothing else coming along at all.

Mr. Shepherd

That is the point I was making. I said in reply to the hon. Member for Gloucester that to lay down conditions which would obtain in the production of the next generation of aircraft would be very hazardous indeed, because no one has yet decided, for example, to invest in a supersonic commercial transport. I do not know at what date that decision will be taken. I have no doubt that if a decision were taken to invest in a supersonic commercial transport that would be the kind of project which would get the support of the Minister of Supply. But it has not been taken. Therefore, I hope hon. Members realise that the present generation of aircraft provide a field for almost all that we can see being produced in the next five, six, seven or ten years, and that when we talk about the next generation we are looking fifteen years ahead. I do not think my right hon. Friend ought to be called upon to lay down the details and dot the "i's".

I have spoken longer than I expected. I say in broad terms that I welcome the Minister's statement. I believe that an industry replanned and revamped on the lines that he has suggested will serve this country much more ably than it has been served in the last ten years. We have the right men and ideas, and there is no doubt about our ability. We can do much better than we have done, and I think that this is the way to do it.

6.44 p.m.

Mr. Ian Mikardo (Reading)

Over the years it has often fallen to my lot to follow the hon. Member for Cheadle (Mr. Shepherd) in our debates. It seldom happens that he makes a speech with which I cannot agree in some measure, and I agree with much of what he has said today. I cannot agree with all of it. I do not think that anybody could agree with all of it, because some of it contradicted the rest. If one agrees with the first part, one must inevitably disagree with the second part, and vice versa.

I hope that the hon. Member, distasteful as the task will be, will read his speech carefully tomorrow and decide which of the two halves of it he meant. He seemed to say that everything in the garden was, is and will be lovely under the dispensation of his right hon. Friend, but in another part of his speech he filled us all with gloomy forebodings.

There is one point that the hon. Member made with which I strongly disagree. He urged that there should not be diversification of the industry because, he said, it is an extremely specialised industry. One of the troubles of aircraft manufacturing is that it suffers from a mystique. Its mystique is the mystique that the hon. Member described, that there is something wonderful, thrilling and highly specialised about it. To some extent, there is something specialised about every industry. There are some respects in which every industry differs from every other, but the difference is nearly always at the design stage or, at least, at the design and development stages.

There is a great deal of ballyhoo about aircraft manufacturing. I say it as one who has worked in the industry and in more than one factory in the industry. British aircraft manufacture would have done a great deal better than it has done, our industry would have been a great deal more competitive than it is and we should have got our aircraft out with a much shorter time-lag between the drawing board and the end of the assembly line than we have achieved, if we had got rid of this mystique and had realised that once the aircraft has been designed, developed and productionised and is a finished product, from that point onwards there is no such thing as aircraft manufacture: there is only engineering.

From the point at which the design has been made and in the development and productionising stage the "bugs" have been got out of the design—to use the jargon of the industry—there is no difference in technique between making an aeroplane and making a railway passenger coach. If only we had got down to this years ago, we should have done very much better.

The plain fact is that one of the defects of aircraft manufacturing is that it was for too long, and to some extent is, controlled by the people who got the top jobs because they were designers, some of them brilliant designers and a few of them the best designers in the world, but, because they were brilliant designers, they were thundering bad organisers of production. One has only to think about it for a moment to realise that the qualities required from a chief designer are very different from, and in some cases diametrically opposed to, those that are required in a production engineer. If we had had an aircraft industry which consisted of design, mock-up, prototype, development and productionising and from that point the whole job were turned over to men who were used to making motor cars or trams or heavy electrical engineering equipment on a mass-produced scale, we should have done very much better than we have done. To be vulgar about it, there has been too much "bull about aircraft manufacture, too many of the rose-coloured glasses boys and too few of the hard production engineers.

Mr. Shepherd

The hon. Member is conveying the impression that a chief designer does the production. As he knows, in any firm, even of 4,000 employees, they have their distinct functions.

Mr. Mikardo

I do know that and the hon. Member knows that I know it. What I am saying is that there have been too many cases where the chairman's chair, and the managing director's chair, has been occupied by a design man rather than by an administrator or an engineer. That filters down. It represents overall control of production policy as well.

There are too many aircraft manufacturing firms where, if a man applies for a job as a progress chaser, they will not give him the job unless he has worked in an aircraft factory, whereas progress-chasing components across a machine shop is exactly the same job in a motor car factory as in an aircraft factory. There has been too much of this mystique of specialisation and I wish we would get away from it.

I agree very much with the hon. Member, however, when he said that there is in aircraft manufacturing, not only here, but throughout the world, a silly artificial inflation. Aircraft manufacture is the frog who wants to be a bull. It blows itself up all the time. It is nonsensical. There is no economic justification for it, as the hon. Member rightly said. It is, as he properly said, a mad scramble in nationalistic prestige which has no justification at all. I do not think that the prestige we get out of it is worth the resources that go into it. This game is certainly not worth the candle. I do not even believe that it can be justified on the argument, used equally by the hon. Member for Cheadle and by my right hon. Friend the Member for Belper (Mr. G. Brown), that because aircraft manufacture is a leader in engineering techniques, therefore, even though it be uneconomic, we ought to put a lot into it, because if we get our aircraft manufacture going technically at a high level all our engineering will be at a high level.

British engineering was "tops" in the world before the first aeroplane ever flew. We did not need, and Stephenson and Crompton did not need, the inspiration of aircraft manufacture to make British engineering the leader of the world in its day and for very many days. There is something, but there is not anything very great, in this. I am perfectly sure that if the money that is poured into aircraft manufacturing in uneconomic terms, for the reason that the hon. Member for Cheadle was discussing, were devoted to a vast extension of technological education, we should see far more results in terms of increasing our competitiveness and our export potential, not only in aircraft manufacture, but over the engineering industry as a whole.

There are other respects in which I very much agree with what the hon. Member said. I very much agree that the Minister's statement ought to have been made a few years ago. I agree with his criticism of the Minister on that account and I agree with his parallel criticisms of the industry. This has been an industry, and the Ministry of Supply has been a Ministry, which has sat down and waited to be engulfed by the flood. The writing was on the wall, it was plain for all to see and some people had the wit to see it.

The Hawker Siddeley Group had the wit to see it and diversified its interests rapidly, so that over a quite short period, from being about 90 per cent. aircraft manufacturers and 10 per cent. manufacturers of other things, the group became, and is now, manufacturers of 30 per cent. of their capacity as to aircraft and 70 per cent. as to other things. Therefore, they have not been engulfed by the flood. The great majority of the industry, however, and the Ministry simply did not see what was coming.

If we want to understand this problem fully, we must take a good look at the industry of which we are speaking. Last week, the Minister, in his statement, described this industry as the most speculative industry there is. Nothing could be more diametrically opposed to the truth. This industry has been for many years the least speculative of all our industries. It has been the most featherbedded industry. I recall the controversy that was aroused when Mr. Stanley Evans, then a member of a Government, described farming as featherbedded. I will not go into the question of whether that was right or wrong. Whether it was right or wrong, however, compared with aircraft manufacturers farmers lie like Indian yogis on a permanent bed of sharp nails. Nobody has ever been so featherbedded as British aircraft manufacturers.

What always amazes me is this. When anybody talks about giving a bit of subsidy to the railways, either to modernise or to pay decent wages to their workers, people say, "You cannot do that. You must not give people subsidies. That saps all their enterprise and initiative and enervates and unmans them." We have, however, been pouring literally hundreds of millions of pounds into the aircraft manufacturers over the years, but no hon. Member on the Govment side has said that we must not do that because it will weaken their enterprise, sap their initiative and enervate and unman them. We have been talking a lot about unmanned aircraft today. The trouble is that we have today too many unmanned aircraft manufacturers who have lost their initiative in this way.

Look at what we have done. The Government have paid for, and are to continue paying for, all the research which is done in Government establishments. Over and above that, the aircraft manufacturers have had a huge array of contracts other than production contracts—research contracts development contracts and tooling contracts, a great many on a cost-plus basis and a great many without any check as to cost at all.

I was in an aircraft factory once when it had just got a tooling contract. The man in charge of tooling was asked to prepare a list and was asked for an estimate of how much it would be. His answer was, "How much do you want it to be?" The finance department said, "We think that we can get£100,000 out of the Ministry", so the man managed to work out a list of tools required for the tooling contract which, by a strange coincidence, came to a little under£99,000. All that sort of money has been shovelled out all through the years.

Another way in which our aircraft manufacturers have had a huge disguised subsidy is that the two airways Corporations have taken over aircraft from our aircraft manufacturers in a crude state and have had to do a good deal of taking the "bugs" out of the aircraft. It has cost them huge amounts of money. I have no hesitation in saying, not from what I am guessing but from what I know, that nearly the whole of last year's loss of British Overseas Airways Corporation was accounted for by taking the "bugs" out of the Britannia, a service which the Corporation has rendered to the Bristol Aeroplane Company.

Whether the Bristol Aeroplane Company is sufficiently grateful or grateful at all, for it, I simply do not know, but it has cost B.O.A.C. about£2 million to turn the Britannia, which came out from the manufacturers as a fairly crude effort, well down on performance and breaking down and delaying services, into a good aircraft. We are all keeping our fingers crossed, and hoping that it will be a good aircraft. It has cost the Corporation about£2 million. If the Bristol Company had had to do it, it would have had to spend the money.

The great influence which is brought to bear—I do not say that it is improper—and virually the directive which is given by the Government to the Corporations to fly British, is, in fact, a directive to the Corporations to use some of their money in subsidising British aircraft manufacture.

Sir A. V. Harvey

The hon. Member would, I think, agree that it is almost impossible for any manufacturer, however good, to get, as he called it, the "bugs" out of the aeroplane within the contractor's sight. In the United States, it is done by the Air Force, which for its good fortune works much closer between civil and military types. By the time that aircraft go on to airline routes, the taxpayer has paid for it in that way. That is not done in this country and the airlines have had to bear the brunt of development in service.

Mr. Mikardo

I am not arguing about where the "bugs" ought to be taken out, but about who pays for them. I am not saying whether it is right or wrong. I am saying as a fact that it is the taxpayer, either directly through the Vote of the Ministry of Supply or indirectly through the losses or lowered profits of the Airways Corporations, who pays for taking the "bugs" out of the aircraft in this country and, it may well be, in other countries, too.

Motor manufacturers have to deliver their cars with the "bugs" taken out and so do the manufacturers of electrical generating equipment and of almost any other engineering product. No other engineering manufacturers are subsidised in this way. We have gone on pumping public money into this industry so that we have the situation that what we have done is to nationalise the losses and privatise the profits in aircraft manufacture.

We have given aircraft manufacturers the best of all worlds, a "heads I win, tails I cannot possibly lose" proposition, because, with the exception of a small number of private ventures of no great magnitude, whatever they have undertaken they have started on the basis that, if the venture turned out to be a winner, they would take the profits and, if it turned out to be a loser, the taxpayer would cover the losses. A good deal of the money that we have paid out in that respect over the years has gone to pay dividends, and high and increasing dividends for large parts of the time, to the shareholders of aircraft manufacturing companies. What we have achieved very largely is a situation in which we have some of the worst features of private ownership and some of the worst features of Government control without the compensating advantages of either of them.

Of course, one can make out a case, especially in a risky or speculative industry, for private enterprise, for the chap who takes the risk, getting a private profit for it. I could make that case myself, sometimes I am tempted to think that I could make it better than some hon. Members opposite, when I hear them making that case not very well. What we cannot make out a case for is private enterprise on the dole. One can never make out a case for a system in which people get profits without speculating, because the State covers every element of the risk. In fact that is what we have had.

This industry, let us face it, is not a private enterprise industry. None of it is private and very little of it is enterprising. There are two steps—and the whole trend of the debate seems to move in this direction—which we ought to consider taking at present to deal with the special difficulties which have occurred in the industry at this time. They are, first, rationalisation—what my right hon. Friend the Member for Belper called a planned contraction, as contrasted with the chaos that would come out of an unplanned contraction; and, secondly, diversification, which was referred to by a number of hon. Members.

I do not believe that we can get away from the fact that rationalisation of the industry, the streamlining of the industry, not just a contraction but a contraction out of the elimination of overlapping—a rationalisation of that sort is absolutely essential if we are to meet foreign competition. Let us face the fact that rationalisation is made extremely difficult because the industry is notoriously non-co-operative, an industry consisting of highly individualistic firms, some of them run by highly individualistic gentlemen—some of us know some of them—who are not good at co-operating with one another.

It is no good the Minister piously in faith exhorting the industry and saying that it must think "long and large", which were his own words. The whole experience of this industry is that it thinks short and petty and thinks selfishly, too. There is no co-operation between one and the other. I know a good many business men all over the world, but the only businessmen I know who have a greater propensity than the aircraft manufacturers to cut each other's throat are the traders in the bazaars in Bagdad. I do not know of any people running a serious industry in the Western world who are so furiously and outrageously competitive with each other.

I see that the hon. Member for Macclesfield (Sir A. V. Harvey) smiles. He knows all about it. When we had a debate, a little while ago, he spoke about relations between some of the aircraft manufacturers. He knows them very well, because he was, until recently, in the industry, and he was, I think, in the industry at the time. Referring to the competition between what might broadly be called the Bristol group and the de Haviland group for the B.E.A. contract, he said: There have been firms desperate to get this order, and I think that they have gone beyond the ordinary bounds of business in trying to do so. A little earlier he had said, with reference to the same point: There has been squabbling and bickering and I would go so far as to say some doubledealing."—[OFFICIAL REPORT. 27th January, 1958; Vol. 581, c. 77–8.] On which the OFFICIAL REPORT records, "HON. MEMBERS: 'Oh'". I am not surprised that hon. Members were a little taken aback by the openness and clarity of the revelation of the hon. Member when he took us for this inside peep behind the dirty scenes of this industry.

Sir A. V. Harvey

The hon. Gentleman has referred to me and I thank him for giving way. There was no inside peep at all. If he had followed the events as closely as I did at that time he had only to read the Daily Mail, which would have given him a clue of the double-dealing.

Mr. Mikardo

I do not read the Daily Mail and it would take a lot more than that to induce me to start to read it and to put my feet on this slippery downward slope. Throughout the history of this industry, all this difficulty of getting co-operation between those in the industry and the difficulty which the right hon. Gentleman himself has had in getting them to build up sensible ad hoc partnerships to which there has been turned a deaf ear, all the sensible proposals he has made—and many of them have been sensible—out of all this history inevitably arises the question whether it will ever be possible to get enough rationalisation to make this industry efficient and competitive with foreign manufacturers unless we have a single ownership of the major units in the industry. Such a single ownership can only be a public ownership.

The hon. Member for Cheadle, indeed, said nearly as much, except for the last part of what I have said. He himself talked about the necessity of doing something more than exhorting in order to get them to co-operate. I have suggested something more than exhorting the manufacturers. Of course, we ought to have done this job—I recognise that freely—in the last Labour Government and have taken a wide measure of public ownership of at least the major airframe constructors and aero-engine manufacturers in the industry. If we had done that some of the problems we are discussing today would not have arisen Fortunately, since it is an ill wind that blows nobody any good, the delay has had some advantage. If the next Labour Government nationalise the major units, as I hope and expect they will, then because of the rundown of the industry we shall not have to pay out very much in compensation.

I turn now to discussing the other major question which is before us, the question of diversification. My hon. Friend the Member for Gloucester (Mr. Diamond) put the case very graphically when he reminded us that the names Messerschmidt and Heinkel, which, to our generation, meant aeroplanes, to the teenagers of today mean the bubble car. Those firms have shown what can be done.

I remember that when I was serving my apprenticeship, at a time when ladies had been induced in large numbers to cut their hair short, there was a substantial industry in making hairpins. Some manufacturers went on making hairpins, fighting every day for a bigger share in a very shrinking market, and all eventually went broke.

I remember that one of the firms had the wit to see the writing on the wall, calling in an adviser and saying, "What can we do instead that is equal to our machinery and capacity; what can we make for which a demand has risen side-by-side with the falling demand for hairpins?" Within a year that firm had a highly prosperous business selling small wireless terminals which were similar to make to hairpins and the demand for which was growing very fast at the same time as the demand for hairpins was falling.

Some firms in the aircraft industry, notably the Hawker Siddeley Group, saw the writing on the wall as well, but others have been so bled out, so emasculated by living on doles for so long, that they did not have the guts to go over to other things and do a bit of self-help. I know that diversification is not easy, but it is possible, as many firms have proved in this industry and, as I have said, in many others. I should like to make a few suggestions about what might be done, some of which have already been referred to by my hon. Friend the Member for Gloucester. I myself have studied seven possibilities of diversification for the industry.

First of all, there are the bubble cars. It seems silly to me that they are being imported in such substantial quantities. There are some similarities in their case with aircraft manufacturing materials and some similarities in assembly techniques. I shoud have thought that the smaller units should examine this possibility.

Then there is coal washing plant. There are very serious delays now in the deliveries of coal washing plant, and there is a great deal of public complaint in this respect. I have in mind a plant, not far from the constituency of the hon. Member for Cheadle, though not in it, which could fairly easily be adapted for the manufacture of coal washing plant.

There are also delays in the delivery of atomic energy equipment. I wonder whether the Minister could initiate some talks between one or two leading aircraft manufacturers who are faced with a serious rundown and the Atomic Energy Authority about the possibility of their capacity being used to help clear some bottlenecks in the supply of atomic energy equipment.

One aircraft manufacturing firm has some experience of manufacturing standard kitchen units. They were not sufficiently standardised and did not do very well. But why should we not now produce on a large scale, by mass production, standard kitchen units which could be bought in bulk by local authorities to put in their council houses? I am sure that we could get it done at a really low price and make a very good job of it. I know one factory which could be converted to this work, and doubtless there are many others.

There is also light rolling stock. In the assembly line stage of the manufacture of light rolling stock—not in the earlier stages, where there is a good deal of casting—there are many techniques which are very similar to those used on the assembly line of an aircraft factory, and most aircraft assembly lines could, with not very much capital expenditure, be adapted for the assembly of light rolling stock.

My hon. Friend the Member for Gloucester mentioned two other subjects. One is the design and manufacture of electronic computers and electronic control equipment. Of course, in the aircraft industry, and in the components industry serving it, there is already a good deal of design and manufacture of electronic instruments of a highly specialised type for missiles. Doubtless they will continue to be developed, but I think that some of the work, not all of it, could be adapted to general use.

There is also a demand for something which we have not yet got and which, so far as I know, is not projected in this country, although it is made elsewhere, certainly in Belgium. That is an all-purpose or general-purpose electronic computer, which could be sold as standard with a few optional adaptations at a comparatively cheap price, for use in a great many applications in many industries.

Then there are transfer machines. I could name half a dozen aircraft factories which could manufacture transfer machines. With the growth of automation, the demand is huge. As my hon. Friend said, 95 per cent. of the transfer machines being installed in British factories today are imported. When one recalls that we were the pioneers of machine tool manufacture, it is a disgrace that as soon as there is a new development in machine tool technique 95 per cent. of what we want should be imported.

The fact is that the machine tool industry is, if anything, even deader than the aircraft manufacturing industry. I notice a slightly sardonic smile on the Minister's face. I suspect that it is caused by some trouble that he has been having with the machine tool industry. I know that he has been trying to put its feet on the right path and that he is having a little trouble.

Mr. Aubrey Jones

I have many burdens and responsibilities, but I have no responsibility for the machine tool industry.

Mr. Mikardo

That is a pity. If the right hon. Gentleman had some responsibility for it, something might be done about it. As it is, nothing has been done about it.

It seems to me that if we are to be able to satisfy a large part of the requirements of British industry for transfer machines from home resources we must go outside the machine tool industry. If the right hon. Gentleman has no responsibility for machine tools, perhaps he will filch some of that business and get some aircraft manufacturers to produce these machines.

Perhaps the right hon. Gentleman recalls that the report on automation issued by the Department of Scientific and Industrial Research said that rapid expansion of the machine tool industry appears to be necessary if it is to be able to supply transfer machines without unnecessary delays, and it is not carrying out that expansion. Perhaps the right hon. Gentleman might act as a marriage broker, not for a shot-gun wedding but for a wedding between one or two aircraft manufacturers and one or two people in the machine tool industry who are having a crack at transfer machines, but cannot expand fast enough. There is a real opportunity here.

I remember Sir Leonard Lord, of the British Motor Corporation, complaining that the advanced machine tools of today cannot be obtained from the British machine tool industry because all that it seems to want to make is drilling and milling machines, so that his organisation and other firms have had to go to Germany for them. If there are any real enterprises in the aircraft industry, here is an opportunity for them if only they will get down to the job instead of spending so much of their time drafting pontifical and self-exculpatory speeches for their chairmen to deliver at their annual meetings.

I appreciate that in some of the cases which I have quoted the changeover from present production to new lines would by no means be easy, and I know what some of the headaches are, but surely it is better to tackle the difficulties of retooling than to continue sitting still, as most of the industry is doing, on the edge of the pavement holding out a begging bowl under the Minister's nose.

I propose now to make one or two narrower suggestions, but I hope some of them may be valuable. One is that a great many of the technicians who are being displaced from the aircraft manufacturing industry would make excellent teachers of technological subjects with a little training. Will the right hon. Gentleman consult the Minister of Education to ascertain whether there is some way of short-circuiting the usual arrangements for recruiting technological and scientific teachers so that some of these men may be absorbed into our education system, which needs them badly? Some of those who are being discharged from aircraft factories come from the top technological and scientific levels.

Whatever we do, clearly there will be some dismissals from the industry. I use the term "dismissals". I am sick of the use of the silly euphemism "redundancy". We used to call it "the sack". We thought that that was a bit rough, so we called it "unemployment"; then we began to think that that was a bit rough, so we called it "redundancy". They all mean the same—that the chap does not get a pay packet at the end of the week. It is clear that there will be some running down of the personnel in the industry.

I urge the right hon. Gentleman, as I have previously urged him, and as I have urged the Minister of Labour, to take positive steps—not merely to exhort—to ensure that the manufacturers consult at the earliest possible stage, the organisations representing their workers about projected and threatened redundancy. The right hon. Gentleman may say that the Government agree very much with that and urge manufacturers to do it. The Minister of Labour has many times said that he agrees with that and urges them to do it. But many manufacturers are still not doing it in spite of all the urging and exhortation.

If the right hon. Gentleman has some criterion for good behaviour among aircraft manufacturers—if he is saying that he will use the power of the contract as the Bank of England used its powers in the steel industry between the wars to enforce a code—will he please make it one of the planks in his platform, one of the ingredients in his criterion, that people should behave decently about labour relations or they will not be treated as being suitable to receive contracts?

In spite of what he has said, over and over again, with, I am quite sure, the most complete sincerity, a lot of the manufacturers are thumbing their noses at him and at the Minister of Labour in this regard. There are still cases where workers learn about their redundancy for the first time by seeing the notice on the notice board saying that such-and-such men will not be wanted after next Friday. I know of one factory that is scheduled to be closed altogether where there has still not been consultation; and when the union representatives asked for particulars of what was going to happen about redundancy, they were told to mind their own business. If redundancy is not a union's business, I should like to know what is.

There is another point on this question of redundancy. Over the years, the aircraft industry has made a huge amount of money, and, over the years, the Government have ploughed in a huge amount of money. I should have thought that, after all that, the manufacturers could give up a bit and the Government could give up a bit to form a fund from which some reasonable terminal compensation could be offered to people being displaced by Government policy, and to whom the displacement is coming as more of a shock because the Government's policy has been unduly delayed, and because the manufacturers have not done their share in preparing for the run-down.

I am quite sure that, in his heart of hearts, the right hon. Gentleman knows that these people, who are in for a pretty rough time by being shoved out, would not have been so harshly treated had both manufacturers and Government taken thought earlier. Therefore, let those two parties pay for that mistake and try to give some recompense for it. A tiny fraction of 1 per cent. of what has been spent on aircraft over the last few years would be enough to give some decent terminal compensation to those who are thrown out of work.

I apologise for having gone on so long. I know that I have been a little contumacious in parts of what I have said, but I have tried to put forward some positive suggestions, and I hope that the right hon. Gentleman and the Committee will find them of some small value.

7.23 p.m.

Mr. Alan McKibbin (Belfast, East)

I trust that hon. Members will forgive me if I do not attempt to deal with the aircraft industry as a whole, but confine my remarks to the future of Short Brothers and Harland, which is of paramount importance to us in Northern Ireland because of the unemployment situation there, and to me, in particular, because the firm's principal works at Queen's Island, Belfast, happen to be in my constituency.

It would seem that ever since the firm moved from Rochester to Belfast, in 1945, instability has been a prominent feature. I should like to quote from a letter sent to me by the firm's shop stewards' committee on this point. The letter says: The present precarious position in the above firm is not an unusual one. In fact, since its inception, one can say that redundancy has occurred on a varying scale—practically annually. Major issues can be illustrated as follows:

• 1945. Representations by trade unions to Westminster Government, and the establishment of Shorts in Belfast.
• 1947. Meeting between the Company and Minister of Supply re future of Shorts.
• 1950. Joint approach by the Company and the workers' side of the joint production committee to the Minister of Supply.
• 1955. Comet redundancy.
• 1955. Swift redundancy.
• 1956. Seamew contract cut.
• 1957. Redundancy owing to restrictions on spending as a result of White Paper on Defence.
• 1958. Present redundancy."

As the letter says, this background shows clearly that instability has been a permanent feature of the industry.

I do not know whether this instability is due to divided ownership. The Government is a majority shareholder, with 1,640,000 fully paid up shares, and the balance of the shares are held by the Bristol Aeroplane Company and by Messrs. Harland and Wolff. There is no point in talking about the past; it is what is to happen to these workers in the future that is of interest to them.

In a recent statement, my right hon. Friend the Minister of Supply was alleged to have said that he would question whether there would be room for more than two aero-engine, and three or four aeroplane, units in the United Kingdom, and he envisaged a reduction in the industry's manpower from 250,000 to 150,000. That has caused considerable perturbation and anxiety among the workers at Shorts, and to end this uncertainty and to let those people know what their future prospects are likely to be I should like to ask my right hon. Friend three questions.

First, in the event of any arrangements that are being made, will he give me an assurance that Shorts will be retained as a completely balanced, self-contained unit of the United Kingdom aircraft industry, with its own design team and engaging on its own manufacture and construction?

Secondly, does not my right hon. Friend consider that the position of Shorts, well away from the mainland of Great Britain, with facilities for manufacturing and repairing aeroplanes and the making of guided missiles, makes it essential, for strategic reasons, that the firm should be retained at whatever cost as part of the United Kingdom line of defence in the event of another war?

Thirdly, in view of our tragically high unemployment rate in Northern Ireland as compared with that in the rest of the United Kingdom, and bearing in mind the fact that there is no alternative employment locally for aircraft workers and draughtsmen, does not my right hon. Friend agree that Her Majesty's Government have a primary responsibility to see that Shorts receive specially favoured treatment in the placing of orders for civil and military aircraft?

I trust that whoever replies to the debate on behalf of the Government will give a message of hope to the workers in Shorts, and to their wives and families.

7.28 p.m.

Mr. Frank Tomney (Hammersmith, North)

What the hon. Member for Belfast, East (Mr. McKibbin) has just said will find a very ready echo of sympathy on this side of the Committee. Members of trade union organisations on this side have been very concerned about the position of Shorts in Northern Ireland, especially as the firm was encouraged to go from Rochester in 1945. The position is doubly serious because a lot of men moved with the firm, transferred their homes and now suffer from a reduction in mobility of labour. Further, they have very little chance of realising on the capital value of their houses, if they acquired them, or of being rehoused here if they return. Pressure has been put on this Government through the T.U.C. but, quite frankly, I do not hold out much hope to the hon. Member of a satisfactory reply to his three questions.

Competition is so keen in this business that the big boys at the top must be most efficient and, if they are not, they must make themselves efficient. People like Shorts will be very much up against it unless they can get some special consideration. On the face of the argument put forward by the Minister today, I cannot see that that consideration will be given. It was obvious a long time ago that, with the gradual slowing down of aircraft production, due to guided missiles, this kind of thing would take place and could not be avoided.

My right hon. Friend the Member for Belper (Mr. G. Brown), in introducing this debate, covered a very wide field, keeping to his usual policy of covering as much ground as he could. He referred to the fact that what was required now was some kind of board for the industry, to be called, perhaps, the Central Aeronautical Board, on the basis of the Iron and Steel Board, as a means of looking at the structure of the industry and for drawing up a policy by which it could reasonably hold its own in the face of competition from foreign countries engaged in the manufacture of civil aircraft.

My right hon. Friend suggested that Lord Hives, formerly Chairman of Rolls-Royce, would make an ideal chairman for such a board. But how will that come about? I should imagine that Lord Hives would insist on having emblazoned on the panelled walls of the board room the answers which he gave to two direct questions put by the Select Committee on Estimates on the supply of aircraft. He was asked what he considered were the important features which, apparently, made some aircraft firms very expensive and retarded their productive efficiency. The reply of Lord Hives was short, sharp and to the point. He said that most of the aircraft companies in this country have never produced anything except balance-sheets. That is the view of one of the leading members of the aero-engineering industry in this country, a company with world-wide ramifications, and himself a man of great prominence.

Today we are dealing with an industry which is vital to the economy of the nation, and on which, as anyone who has read the Report of the Select Committee on Estimates on this industry realises, a vast amount of money, time, energy, technological skill and planning skill have been expended in the past. It is true that we have had some successes, but we have also had a lot of expensive failures, and it is obvious that that cannot be allowed to continue. That is the reason for this suggested regrouping, call it whatever we will.

The aircraft industry will have to be geared to the production of civil aircraft. According to one estimate I have seen, there is an expectation that 6,000 aeroplanes, turbo-prop and jets, could be produced over the next ten years at a cost of roughly£6,500 million. That is a tremendous programme. It could be the means of restoring the life-blood of the industry, and it could settle a lot of the problems for the people in the industry, but it is as well to realise what we are up against in this direction.

Not only have the manufacturers in this country been jealously competitive, both in their research and in their prices, but they are also up against bigger operators in the United States who are financially stronger and are extremely well organised. In addition to having their production lines and their retooling sections better organised than ours, they enjoy the benefit of very large credits from the Export-Import Bank and the benefit of the American aid programmes. Most of the money for the programmes of the United States for aid to foreign countries is spent in the United States, which gives the aircraft manufacturers there a decided advantage because of the overall economic strategy of the United States in regard to the manufacture of capital equipment. This is where their tremendous power lies, and they do not hesitate to use it.

It has been pointed out that the Britannia had a lot of teething troubles, especially those due to icing at certain altitudes, which gives rise to great stress. Before those troubles were over, the first Britannia to be submitted to the Inspection Board of the United States was recommended for 114 modifications, and everybody familiar with the aircraft industry knows what that means. These modifications included navigation lights, structure, exit doors and fire precautions. These are all items on which one would think that the manufacturers would have had standards applicable to the whole industry. Whether the reasons for the modifications were genuine or not, who can tell? The main thing is that, whatever the purpose, it has meant that the Bristol Company may well have been delayed for five years, and in the meantime the American industry will supply the market with jet airliners. These are the kinds of manœuvres that go on internationally in this industry, and this is the kind of thing which the industry in this country is up against.

Research has been referred to in this debate, and this problem was investigated by the Select Committee on Estimates. I was glad to note, as a member of the Select Committee, that both the Minister and my right hon. Friend the Member for Belper gave due credit to the Committee for its very exhaustive Report on an investigation occupying a period of fourteen months. During that time we discovered, after examining company after company and witness after witness, that much of the money spent could not be accounted for. That is the trouble with Treasury interference and the financial system in this country. When we examine these Estimates, we find that the money has gone down the drain.

There are lessons to be learned from that by Lord Hives, if he is ever appointed chairman of this new board. I suggest that we should give every member of that board a copy of the Committee's Report to read, to take to bed with him and to leave on his bedside table, to be studied as long as he remains a member of the board, since all the possible evidence is there about the position in which the industry is, and why. Obviously, in an industry of this character, on such questions as metal strain and fatigue and new designs of engines, Government research is fundamental and will have to be carried on for a considerable number of years. What is the Minister's intention about the ratio of the cost which the industry should bear on the preparation of basic new designs and the investigation of new engines? I should have thought that that was a job for the Royal Aircraft Factory at Farnborough. The Report suggests that the manufacturers should be charged with the responsibility of providing at least 30 per cent. of their costs on research over the whole field in connection with the manufacture of their own aircraft.

It is true that, after the advent of the jet engine invented by Whittle, although we have several good engine firms in this country, jet planes and aero engines are much of a muchness. Rolls-Royce hold a very enviable position in the world. It has been said, but I do not know if this is true, that 70 per cent. of the aeroplanes in the world are flying with engines either manufactured by Rolls-Royce or manufactured under a Rolls-Royce licence. This is a wonderful achievement. I think that consolidation on this particular point is absolutely correct. I do not think that there is room for more than two firms in this side of the industry.

We have been told that the industry is exporting£130 million worth of goods per annum, but that is using only about 25 per cent. of the industry's productive capacity. The job is how to gear the rest of the industry in military and civil requirements to make sure that we get the best out of the industry with no duplication of models and that no two companies are simultaneously employed on the same pet theory.

In retrospect, it can be seen that although wonderful high performance aircraft, the V-bombers were so near to each other in performance that one aircraft could have done the work of all three. All three were on the design boards at the same time for the same purpose. While the Victor was being developed, it was offered to B.O.A.C. as a basis of long-term planning for passenger traffic and as a possible passenger liner. It could have been so adapted since it had a payload of 50,000 lb. and was able to carry 100 passengers non-stop from London to New York at speeds similar to those of American jets. The opportunity was lost and, as a consequence, airlines in this country will be faced with new American jet airliners before we have anything comparable to replace British aircraft now going out of style and out of production.

The two requirements, military and civil, should run alongside each other so that there is no duplication between military and civil purposes. I agree with my right hon. Friend the Member for Belper that, in air trooping, only the best is good enough. I do not believe that we can send troops overseas in planes which fly slower than the defence planes or bombers accompanying them. Air trooping, which is now mainly the responsibility of private firms, which are not operating the best and most modern aircraft, is a matter which the Minister and the Departmental chiefs and Ministers will have to consider. The present system cannot be allowed to continue. The best, and only the best, should be available and that can be arranged if the overall position is considered.

I want now to refer to something which has not yet been given enough prominence in the debate, the position of the men employed in the industry. If the industry has to contract, through amalgamations or otherwise, certain guarantees must be given not only to the manufacturers, but to the men employed in the industry. There has lately been criticism, chiefly by the Society of Licensed Aircraft Engineers, about the number of men in the industry who are not of the qualified standards. If there is to be a contraction, it is incumbent upon the men left in the industry to seek to qualify themselves at those standards to provide a place for themselves in the industry.

If we take the view that from now on the industry will calculate its labour needs very carefully, and that only those whose skill and qualifications are required will be retained, then the same kind of assistance which is offered to the companies by the Government must be offered to the employees, because in this industry workers cannot be moved all over the country, since the industry's locations are fixed and aircraft factories cannot be built readily here and there.

If, as has been suggested, there is to be a reduction of 100,000 or 150,000 men, those who are left must be considered essential to the export of British aircraft and the development of the industry and given permanent contracts of employment. If that is not done, they will be quite justified in seeking employment opportunities elsewhere. That is a fair case for the unions to put to both employers and the Ministry. The position at Shorts is exceptional, but it shows what can happen to an industry of this character when left high and dry without export orders.

It is necessary to get priorities right in this expensive business of developing the industry. As politicians, we all know that there is only a certain amount of money in the Exchequer, and certain industries consider that they have a claim on it. Whatever party is in power will have to decide how best to allocate that money.

In this respect, my right hon. Friend the Member for Belper is at cross-purposes with himself, since he also supports agriculture. For my part, if it is a question of bigger and better onions and bigger and better carrots against bigger and better aeroplanes, I am all for the bigger and better aeroplanes.

Mr. G. Brown

It will give my hon. Friend indigestion.

Mr. Tomney

We will make more money. That is what we must consider.

The export of engineering skill must be given more prominence than growing food for which subsidies are paid because of the emergency of war time. Since the advent of the hydrogen bomb, that is no longer as important as it was. We have to decide the priorities of these things for the development of the industry.

Where possible, there should be talks on the lines suggested by my hon. Friend the Member for Reading (Mr. Mikardo) about the redevelopment, retooling and redirection of certain parts of the industry; and, if necessary, a part of the industry should receive special consideration and special priorities to retain a reserve of labour—although not necessarily engaged in aircraft manufacture— in case it should be necessary in an emergency to gear future development. In a special consideration of that character, 10,000, 20,000 or 30,000 men may have to be retained.

If some of those points can be met, the realisation that the industry has had to contract, that it has been somewhat wasteful in the past and that it is our job to make it as efficient as possible, will bring understanding from the men most vitally concerned and from the trade unions.

7.50 p.m.

Mr. Knox Cunningham (Antrim, South)

I have listened to all the speeches made in the debate so far. Inevitably, in most of them questions were asked of my right hon. Friend the Minister of Supply. I was disappointed in the statement that he made in the House some time ago, and I am still disappointed as a result of what he said today. I am depressed by his estimate that there will be a reduction from 250,000 to 150,000 workers in the industry over five years. Her Majesty's Government bear a responsibility to this industry, for the change in defence policy is one of the major factors in the problem facing the industry.

I do not wish to deal with these general matters at length. I want to concentrate for the short time available to me on the question of the aircraft industry in Northern Ireland. I appreciate what the hon. Member for Hammersmith, North (Mr. Tomney) said about the position there; it is a very difficult one. Short Bros. and Harland is a firm which manufactures in Belfast. It came there in 1937 and it is a combination of Short Bros., from Rochester, and Harland and Wolff. During the war the firm expanded tremendously. After that, as happened in other aircraft factories in the United Kingdom there was a reduction in output and in personnel.

Then, in 1947 it was decided to merge with the factory in Rochester and to concentrate all the production in Belfast. As a result of that, employment in the firm increased by 5,000 persons during the next ten years. In addition, highly skilled personnel were taking part in the production of aircraft such as the Canberra and the Britannia, and with the active encouragement of the Government of Northern Ireland the firm has extended into the arena of electronics and guided missiles.

A design team has been assembled and a well-equipped research laboratory has been built to carry out its work. During last summer the number of persons employed by the firm rose to about 9,000. It has become a major industry in Northern Ireland. Since then, owing to a different climate in the field of defence, employment has fallen by about 700. Recent statements made by the company to its workers indicate that there may be further redundancies, affecting about 1,100 more workers, resulting mainly from the cut in the Canberra contract. These figures are extremely serious when viewed against the background of unemployment in Northern Ireland. Over 20,000 people are already unemployed in Belfast, and over 50,000 in the whole of Northern Ireland. That is equivalent to over 10 per cent. of the insured population.

I am very glad to support my hon. Friend the Member for Belfast, East (Mr. McKibbin) in the work that he does for Short Bros. and Harland. His efforts are untiring. The main factory is in his constituency, but there were two subsidiaries in mine, one the Altona factory, at Lisburn, and the other at Ballyclare. In respect of these two factories, however, a decision has been taken to close, and they will not be reopened. It was originally intended to absorb over 70 per cent. of their employees in the main factory, but now, with this further reduction, I do not know what will happen to them.

Recently, a delegation of the firms workers came to this House from Belfast. I discussed the situation with them. They included two of my constituents, Mr. John Hamilton and Mr. William Davis. I was deeply interested in what they told me of their problems. The Minister of Supply has an added responsibility for the firm. He has a controlling interest in it. He is the majority shareholder and is, therefore, responsible in that capacity for the workpeople employed in the firm. That is in addition to his general responsibility for the whole industry.

With an unemployment figure of over 10 per cent. in Northern Ireland, there is no comparable part of the United Kingdom with such a high rate of unemployment. That is despite the excellent efforts made by the Government of Northern Ireland and the Chandos Advisory Council to create further employment there. The employment situation means that workers who are declared redundant by Short Bros. have no place in which to find other similar employment. In Great Britain, other doors are open, in the engineering industry and other industries. That is not so in the case of men leaving Short Bros. and Harland.

I may be asked what solution I have, or what suggestions I can make. I have no suggestions to offer. I say that because, first, I have no factual knowledge and no access to the sort of advice which my right hon. Friend has in dealing with the overall picture, taking into account the defence policy and the Government's policy in relation to the whole aircraft industry. Neither have I the knowledge which is available to the management of Short Bros. and Harland. In those circumstances, it would be an impertinence for me to begin to suggest solutions.

I am not here to usurp the work of the management of that firm. But my right hon. Friend has access to that information, and he should see that the management is efficient. Efficiency is a question both for management and workers. In an industry such as this both must play their part. They have a joint responsibility for success or failure.

The situation in Short Bros. and Harland is grave. There is a crisis in the aircraft industry in Northern Ireland which may well develop into disaster. I ask my right hon. Friend for immediate help—for "action now" which will be worth all the words of encouragement and promises for the future given in this House or elsewhere.

8.0 p.m.

Mr. Charles Pannell (Leeds, West)

I apologise to the Minister for not being here earlier. I was engaged on business of the House, in a Select Committee, and if I tackle him on any point that he has made I hope that he will excuse me.

I want to turn to the question of Northern Ireland straight away. This is an issue on which the Ulster Unionists and the trade unionists agree. Misfortune may make strange bedfellows. I have no constituency interest in the matter; mine is a trade union interest, in that I am one of the adopted candidates of the Amalgamated Engineering Union, and we proceed on the assumption that unemployment anywhere is a threat to full employment everywhere.

I suggest that there are considerations in Northern Ireland which are not present in other parts of the country. The Government must consider Northern Ireland against a national strategy which goes far beyond the Minister's responsibility. I, too, was present when the 120 delegates came from the workshops of Northern Ireland, at what must have been considerable trouble as well as expense for working men. It must have been one of the largest trade union delegations ever to have come to the House of Commons. It made a considerable impact. It addressed us with a great deal of knowledge upon the problem of the disappearance of the firm of Short Bros., although it was not quite so strong in its ideas of what should be done when Short Bros. went.

We are all in favour of cutting the arms bill, and the aircraft industry is involved in that question. But what we are really considering is the question of redundancy, and the fact that men must live. The idea of re-arming at all is to maintain a viable economy, and one doubts how far it is worth doing anything in life unless we can maintain people in jobs and they can maintain their homes.

Following the Minister's speech, there seems to be little future for civil aircraft and no future for military aircraft. We therefore have to ask what will be left for Northern Ireland when we take this industry away, bearing in mind the position of Northern Ireland in the defence of this country. We spend much time considering the situation in Cyprus, and the grievances of the natives of other islands. I have complained about this before. From time to time people move the Adjournment of the House under Standing Order No. 9, and at some stage some Ulster Unionist Member will have to move the Adjournment of the House under that Standing Order to call attention to the plight of the natives of Northern Ireland, and the fact that 12 per cent. of the working population are unemployed.

We have discussed the situation of Malta and its dockyard; the question of Northern Ireland is a similar one, brought nearer home. It is the partition of Ireland which causes Northern Ireland to be a not very viable unit—but I do not want to go into that question. What I am suggesting is that when we are considering what will happen about Short Bros. in Belfast we must also remember that there are larger concepts to be considered than the mere future of the aircraft industry.

This is an economic question, and I am not trying to make it a political one, or to suggest that the return of a Labour Government can solve it. The fact remains that we have used Northern Ireland as a bastion in time of war. We have written into the Constitution that it shall be always attached to this country, so long as it wants to be. Presumably it still wants to be, and in those circumstances the Government have an added responsibility. They hold 70 per cent. of the shares in Short Brothers, and it is not right that they should take the same attitude as they take in the case of other areas of Britain.

My own city is richly diversified. The fact that it had such a great diversity of industry cushioned it from the impact of the worst of the inter-war years of unemployment. But I am an engineer, and I consider the trading aspect of the problem, and the fact that the engineers in my constituency are the same sort of people, and in the same trade union, as those in Belfast. We cannot continue making patriotic speeches about Northern Ireland—of which there have been too many in that country and too many from the benches opposite. The test is how much the Government care about Northern Ireland, and its traditional allegiance to us.

Twelve representatives are sent here from Northern Ireland as permanent Lobby fodder for the benches opposite. They should have a greater sense of gratitude. I do not want to use the term "dumb, driven cattle". That was ruled out of order by the Chair. If I had been called before the hon. Member for Antrim, South (Mr. Knox Cunningham) I should have brought before the Committee similar facts. That is why I have not dilated upon the situation in Ireland. There is a flat responsibility on the Government to see that there is a redeployment of industry in Northern Ireland, and in respect of a firm in which the Government own 70 per cent. of the shares.

I asked the people in the delegation that came over what they thought the future of Northern Ireland would be if there were no future in aircraft. They talked to me about the possibility of the electronics industry, the building of power stations and atomic-powered ships. They also mentioned a specific project—the Princess flying boats. I believe that an American firm is interested in fitting them with nuclear engines. We are entitled to ask whether Britain is interested in this project, and whether-Short Bros. can do the job. The fear of the workers is that in any regrouping of the aircraft industry the Belfast works will be left completely in the cold.

Geographically, Northern Ireland is not a suitable place for manufacturing motor cars, because the question of road transport enters into the matter. The natural engineering products are ships and aeroplanes, which can be seaborne and airborne respectively. In this question of the diversification of industry we must also bear in mind the loosening of the East-West trade, and the possible tractor market in China. I am not speaking facetiously. I was reading a learned paper recently which stated the number of tractors that were needed to open up the whole of China, and this seemed to me to be a matter which might be explored. I am concerned that Northern Ireland shall not be some sort of slum on the periphery of England. We have a bounden duty to see that its economy is not less prosperous than our own, since we have used it in war for our defence.

I do not know whether any of the matters referred to by my hon. Friend the Member for Reading (Mr. Mikardo) apply to Northern Ireland. He spoke about the sort of things that the aircraft industry might produce as it is reduced. He referred to bubble cars, coal washing plant, atomic energy equipment, standard kitchen units, electronic computers and transfer machines. It seems to me, however, that as the aircraft industry runs down, unless the Government are prepared to have redundancy, with the mass sackings that I remember as a young journeyman, someone in the Ministry of Supply must get down to the job of seeing that alternative industries are brought to this part of the world, so that we shall be able to say that, just as it has been useful and advantageous to us in time of war, so it will not be neglected, but will have continued dignity, in time of peace.

8.11 p.m.

Major H. Legge-Bourke (Isle of Ely)

The hon. Member for Reading (Mr. Mikardo) said that the aircraft industry was a game which was not worth the candle. I want to show that it is not only worth the candle but that it is a game which, unless we play it properly, will leave us with no hope of holding our place in the world. Great attention has rightly been brought to bear upon the running down of certain sections of the aircraft industry and its effect upon many thousands of men in this country and in Northern Ireland.

We are inclined sometimes to misinterpret the term "mobility of labour" and to assume that it can only be carried out when we move a man from a job. Sometimes it includes moving the job to the man. This is not a difficult problem in relation to the aircraft industry, unless we go the wrong way about it.

In having this debate tonight, which I agree is important, although perhaps disappointingly attended, we must look at these problems in the context in which we find ourselves. The first question to put is, "Who is winning the cold war?" If it is not ourselves, why is it not? There is another important factor which has to be borne in mind at the present time. It is that we are losing the cold war with astonishing and terrifying rapidity.

Why are we losing it? Because the Soviet Union started its technological revolution away back in the 1930's and we have only started it since the war, without the great measures of totalitarian rule which the Soviet Union had. They could get men, materials and finance whenever they wanted it. We had to start impecunious, as the result of having saved the world from Hitler's Germany and from Japan. We started it with our reserves run down. The only thing we had was our technical ability and our experience, of making good when we have not enough resources to do it with.

That is the situation in which we find ourselves. My right hon. Friend said there was a danger of our dropping behind. I think we have already done it, The reason is obvious. Russia is rapidly, becoming, if not already, a creditor nation She has the power in men, materials and finance whenever she wants it, and she has the power to be able to afford to make mistakes. We are finding mistakes to be very expensive indeed. If that be the case, what will ensure our restoration to our former position and then, having restored ourselves, the perpetuation of the position that we ought to hold in the world? I do not wish to repeat the speech which I made on the Air Estimates. I said then that, whatever else happens in this connection, we cannot ignore the geography of the United Kingdom in its relationship to the rest of the world. I would only repeat that if we take Australasia, Singapore, a small part of Indo-China, the tip of South America and Antarctica, the rest of the continents are in the hemisphere that we are in. It is for that reason, above all others, that air communications must be of vital importance to us. If we fail in this matter, whether in time of peace or of war, we shall be in a strategically weak position. We must not ignore our air communications.

The question of communications, and particularly of grand strategic and tactical communications, is normally considered in terms of military might and of war. In this matter we must have a continuing grand strategy in time of peace. Unless we have a sense of the need to ensure that we have some grand strategy, we are endangering peace unnecessarily. I do not believe there can be a much more important factor in the world today than that we should have really efficient air communications and grand strategy, and those should be fed by an industry which is capable of producing all that we require.

My right hon. Friend thought that the great decision to abandon the manufacture of bombers was taken in the light of the belief that the bomber would be vulnerable in guided missile defence. Some hon. Members know that I have for some months past been in close contact with the Swallow project of Dr. Barnes Wallis. How I came into touch with him is a matter of great personal interest to me and of some fascination, but certainly something on which I do not wish to dwell unduly. It is a story of most extraordinary coincidence in this field. Nevertheless, it is irrelevant to this debate.

I want to stress that it may be all very well to say that guided missiles are certain to bring down the bomber in the future, but that presupposes one particular factor, which is that the guided missile will have more maniœuvrability than manned aircraft. I emphasise the distinction between intercontinental ballistic missiles and guided missiles. I am not talking about the intercontinental rocket but about the ground-to-air, air-to-air and air-to-ground guided missile. The only entitlement we could have for saying that a bomber is inferior to the guided missile is that we could always design a guided missile to be more manœuvrable than a manned aircraft.

Dr. Barnes Wallis who has served this country very well in the past and has had many difficulties in the past, but who has proved himself right to those to whom it was essential he should prove himself right, has evolved a theory, which he has proved, that from a practical production point of view one can always make a manned aircraft turn on a smaller radius than a guided missile. He has had a great deal of publicity recently—probably quite unwittingly, I am the cause of it. There is no man in this country who deplores publicity more and is more embarrassed by it than Dr. Barnes Wallis. I hope my hon. Friend who is to reply to the debate will at least realise that there is no man on earth who is more pained by the recent publicity he has had.

When I met him last September he was almost in despair, for the simple reason that he believed he was on the brink of one of the most important discoveries of his life and at that moment the axe came down on defence. Last September he gave the impression that this idea was so important to his mind that he could not allow himself to die with it inside him. He is over 70 years of age. This was an idea which he had to see developed while he was still alive. It was only natural that the place to which he should turn was a place where there is plenty of money and which is friendly, anyhow militarily, to us—the United States.

Without any hesitation whatever, I say to the Government that if as a result of false advice or false economy Dr. Barnes Wallis is driven out of this country, I shall do my best for the rest of my life to find out who was responsible and expose him the public eye. I have not the technical knowledge, nor do I pretend to have it, so I do not know whether this idea is capable of implementation in a practical form. All I know is that some 775,000 experiments had been carried out before I met Dr. Wallis, and that when the decision was taken by my right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) so to curtail the expenditure of the Ministry of Defence and the Board of Trade, they had to drop something. What they had to drop was the something which was perhaps furthest from producing immediate results.

When I heard that I felt we had got our priorities all wrong. The hon. Member for Hammersmith, North (Mr. Tomney) said that we must have our priorities right. I could not agree with him more. I say this frankly to my hon. Friend. First, I want to congratulate the Minister of Defence for having kept the project going as long as he did, because he was not entirely helped by some people very close to Dr. Wallis during that period. The difficulty we are under is this. On the one hand we have Vickers, which is the company Dr. Wallis had been working most closely with, confronted with the problem of employing and turning out aircraft which are going to earn money, not only for the company but for this country. On the other hand, there is the problem of how to keep research going for the longer-term future.

We have those two problems, and I believe it is typical of the problem which runs throughout the industry. We have the scientist, the research expert, the man who sees twenty, thirty or forty years ahead, who is costing the company "the earth every day in order to produce his ideas and get them developed, and, on the other hand, we have the man in charge of the factory keeping the men employed, making sure the right materials are turning out at the right time, the right number of aircraft coming off the line at the right time and going to the right places. I believe that situation is not only true of Vickers but of other companies. If we have a situation like that in which companies are working to capacity in turning out a certain number of types of aircraft, Viscounts and so forth, in order to meet the immediate need and try to earn some foreign exchange with exports, where is the other man to go? If you have not the working capacity, where is the other man to go? Where is he to find the money? This, I think, is where the State must come in.

The House has been a little unfair to my right hon. Friend the Minister of Supply by being so unenthusiastic about the statement he made the other day. Anyone who thinks for five minutes must realise that my right hon. Friend is not his own master. Who is his master? It is the Treasury. Every time it is the Treasury. It is the Treasury that caused the cut in defence expenditure some time ago. It is the Treasury that brought about the position where we could not afford short-term and long-term activities. It was the Treasury that said it was not prepared to cut the social budget by more than a certain amount and that, therefore, the money must come from the defence budget. It is the Treasury that has said that it is more important to put more money to old-age pensions than to put it into research.

It is all very well for hon. Members to say that more money is required for this thing and for that. Where is it to come from? We must change policy to do that? What policy are we to change to? Are we to say that we shall pay less to the Army and the Navy and, therefore, more to the R.A.F. so that it can buy more aeroplanes, or are we to say that we shall cut the whole of the defence budget in order to finance old-age pensions? Or are we to pare down our social services in order to ensure that we hold our place in the world?

In the debate on defence last November, I tried as bravely as I could, I hope, and as fairly as I could, to face up to this issue. It is quite obvious that any Government in power could not ensure an adequate amount of money for the future development of aircraft unless it was prepared to change its policy on some other front, and the question is: what?

I repeat tonight what I said last November. I believe that in our present position, losing the cold war every day, we should be prepared to reduce our civil expenditure by at least£100 million in order to make sure that at least£100 million more is made available for research and development. I say that, but I hope that no one will assume that the Government ought automatically, without careful scrutiny, to make finance available for any company that wants it just because it happens to be building aircraft.

This brings me to my last point. I rather wish that before this debate had begun a little sign had been put up in the House illuminated in the same way as that sign always is before the aeroplane takes off from London Airport—"Please fasten your seat belts". And those that I should have liked to have seen fastening their seat belts on the Treasury Bench this afternoon would have been the Chancellor, the Minister of Defence, the Secretary of State for Air and the Minister of Transport and Civil Aviation, as well as the Minister of Supply. I must say that I was glad to see that at least the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation has been present for a good deal of the debate.

Without being too derogatory, I think that at present there are one or two Ministerial heads that want knocking together extremely hard. I do not blame the Minister of Supply for the fact that they have not been knocked together. The person who should do that is the Prime Minister, or the Minister of Defence. Can anyone assume that our aircraft industry, in view of our present position in the world, fighting a cold war, will be saved when we have, on the one hand, the Minister of Supply responsible for research and development of military aircraft and, on the other, the directorate of the Department of Scientific and Industrial Research responsible for the State financing of research and development in the civil field under the Lord President of the Council on a new road to Banbury with rings on his fingers and bells on his toes? The Minister of Supply has to stand up to him. On top of that, the Ministry of Transport is in charge of B.O.A.C. and B.E.A. from the Ministerial point of view and then, in the Defence Committee of the Cabinet, we have the Minister of Defence with the Chancellor of the Exchequer. How on earth will we stand a chance of fighting the sort of battle we shall have to fight if we are to prevent the Russians winning the cold war?

I cannot express my belief forcibly nor eloquently enough, but I would almost go down on my knees and pray that the Government will as soon as possible form a top level Committee, be it a Ministerial Committee or a mixed committee made up of top civil servants or people from outside, to select and support those with the most promising ideas for the future in the scientific field and, in particular, in the field of communications.

Hon. Member after hon. Member has shown that what we have been trying to do, like the old 1930 gangsters, is to play the "Chicago piano" without having enough rounds to put in a belt for one gun. If too many things are going on at once it simply means that nothing is done properly. That is the biggest problem from which the aircraft industry is suffering today. We have been trying to do too much, and the result is that we have done nothing and we are now in danger of losing some of the best brains because they are fed up to the teeth with it.

Geniuses are people who cannot allow an idea to remain undeveloped. If we hand over lock, stock and barrel to the United States one of the most original ideas since Wilbur Wright showed that a balloon was not the only way to fly, we have not only done a personal slight to a man who served this country well, but we have virtually thrown away unnecessarily one of the greatest geniuses this country has ever produced who could help us, perhaps as no other man, to play a better part in trying to win the cold war instead of being content to go on losing it.

8.34 p.m.

Mr. A. E. Hunter (Feltham)

I will not follow the hon. Member for the Isle of Ely (Major Legge-Bourke) over all the ground that he covered tonight. We always listen to him with great interest, because we know of the interest that he takes in defence problems.

I should like to deal for a few minutes with the aircraft industry, which today employs a quarter of a million people. Therefore, it can be called a major industry upon which a large number of people depend for a living. Different accounts have been given of the redundancy that is likely to take place in the coming months. The hon. Member for Macclesfield (Sir A. V. Harvey) felt that the industry will run down by 60,000 to 80,000 workers. I think that the Minister of Supply's estimate is that it will run down to 150,000, which means that there will be a redundancy, in the months ahead, of approximately 60,000 to 100,000 employees.

The point to be borne in mind, and which I hope the hon. and gallant Member for the Isle of Ely especially will bear in mind, is that the aircraft industry is in that state because of the change in defence plans. This change in defence plans is not confined to Britain. The aviation experts of America, the Soviet Union and other countries have more or less decided that the aeroplane is on the way out and that the rocket and the guided missile are coming in. If the Government accept the advice of their advisers that the aeroplane is no longer required in the same numbers for defence as hitherto, the aircraft industry must face a crisis unless urgent measures are taken to deal with the situation. The hon. Member for Macclesfield has given the figure of 100,000 unemployed in the American aircraft industry, an industry which is well geared up. This, too, is due to the change in defence and military plans.

The aircraft industry is vital to Britain. The latest available figures show that its exports have reached a total of£130 million a year. It is a great engineering industry of tremendous export value to Britain. I therefore say to the Minister of Supply that the necessity for exports is one of the reasons why we should go forward to expand the aircraft industry.

Neither must we forget the Commonwealth. To my great disappointment, and, I am certain, to the disappointment of many other hon. Members, there have been reports that contracts from New Zealand and Australia for new air liners are likely to go to the United States. I support the plea which has been made to the Minister that we should do all we can to get exports in the Commonwealth countries for our aircraft industry.

As I have said, the industry is likely to be run down by nearly 100,000 workers during the months ahead. Reference has already been made to Belfast. The industry is important also to the London area. We have many great aircraft factories in Middlesex and Surrey. It is also vital to the people of southern England when questions of redundancy arise.

The civil aviation side of the industry is one which we should do all we can to expand. If redundancy is coming, however, we must ensure that the workers are given every consideration and that if there is redundancy it is cushioned by compensation. We realise that the changeover in military policy, not only of this country but of the world, from the aircraft to the rocket and the guided missile, will result in the cancellation of military contracts and as a result cause unemployment in the aircraft factories

We should, therefore, go forward with a big programme for civil aviation and for exports. Despite the running down of the industry, it must be an industry of the future. We move forward into an age in which I visualise not only the transport of passengers by air, but the transportation of goods from one country to another by air just as freight is now carried in ships, and we must also go ahead and expand the air traffic of our Airline Corporations. Therefore, I do not think that we need be to pessimistic about the aircraft industry.

We want to do all that we can for those workers in the aircraft industry who may become redundant. We want to make sure that we go forward with a policy for the export market, including the Commonwealth market, and also endeavour to open up new grounds in Asia for the export of aircraft. If the Government go forward with this policy, I am certain that they can, even if the industry cannot, maintain the present 250,000 employees and at least do something to see that the redundancy is small. The Government, through the Ministry of Labour, should also endeavour to do all that they can to see that the aircraft workers who become redundant are paid proper compensation.

8.42 p.m.

Mrs. Patricia McLaughlin (Belfast, West)

I am sure that we all agree that what we need and must have in this country is a very efficient aircraft industry. In an industry such as this, to supply civil aircraft we have to give the customer what he wants, whether the customer is in this country or in any other country. For our military needs we have to produce and provide the type of aircraft which is the most suitable, most practical and most efficient for the job.

I am not a technical person, and it is my regret that I have not been able to be present for the whole of this debate, but I have been very impressed by several points put from both sides of the Committee. I am grateful to the hon. Member for Leeds, West (Mr. C. Pannell) who spoke about Northern Ireland in support of what was said by my hon. Friends the Members for Belfast, East (Mr. McKibbin) and Antrim, South (Mr. Knox Cunningham).

A great number of people in my area have relied for work on Messrs. Short Bros. and Harland, and they still rely on them, but I am afraid that quite a number, unfortunately, will not be able to rely for work on Messrs. Short Bros. and Harland unless something very serious and particular is done soon. The Minister of Supply admits that he is the majority shareholder. It is an unusual kind of company when the majority shareholder sits complacently and allows the firm to go down the drain. I am sorry that the Minister is not in his place because there are several points which I should have liked him to answer.

There is a large and very efficient design team at Shorts. I understand that this design team may be curtailed, and that would necessarily curtail the efficiency of the firm as a whole. There is a diversity of production. The Minister himself, as recently as 23rd October, came to Northern Ireland and opened a new building for the research department of Messrs. Short Bros. It was a rather funny and unusual thing that a very short time after the opening of that building there was 10 per cent. redundancy there. I cannot think that it is a very well-run company from the point of view of the majority shareholder.

The main concern of this department, which was opened by the Minister is stated in the brochure which was issued at the time. It states: The main concern of the department is with systems engineering, either to meet the requirements of other divisions of the company or independently. It goes on to say: Thus it is at present concerned with the development of various auto-stabilisers, autopilots and control systems for aircraft applications and also with missile guidance and control equipment. Independent projects include the Short analogue computor, and a helicopter flight simulator. Apart from these main projects the department handles research and development on a wide variety of related components and techniques. I will not weary the Committee with all the other details which are there. This department is allied to and is part of the main aircraft manufacturing company and produces all those various kinds of ideas which can be developed and used and sold profitably in our own country, in the Commonwealth countries, and in competitive markets all over the world. I should like to ask the Minister whether he is really satisfied that this side of the company's activities, which can provide profit, is being completely developed and pushed forward just as hard as possible.

We are very disturbed. We have young men who for years have looked forward to going into Shorts, who have planned to be the skilled people who will make our country highly industrialised and very efficient. They go through their apprentice training and then go either to the technical college or to the university. This is a wonderful scheme, and we are very proud of it. But what is happening? These young men see no hope for the future in Northern Ireland, and they are going to other countries, and so we are losing the very people we are endeavouring to train in order to give us a continuing standard of highly efficient and skilled men. That is not a sound or practical situation.

Much has been said time and time again about the problem of Shorts. We remember that the present Government raised the number of employed there to 8,000, or a little more. However, I would tell the Government that they have a responsibility in this matter and that they cannot shirk it, because they arranged that contracts would be provided and now they have arranged that contracts will be rescinded. Things like this cause chaos in private industry. How on earth can one expect this sort of thing to do anything else but cause complete calamity in a major industry in an area where we are short of industry and employment? It is something which pious hopes and kind words will no longer help. We have got to the stage when our men in Northern Ireland are right in saying, "We have lost our patiencce. We expect some practical results."

There are several other points to mention. First, a portion of the Canberra contract has been rescinded. Is it possible for the Minister very seriously and urgently to consider whether there is any way to slow up the imminent redundancy at Shorts? The problem has been looked at, but not as a matter of urgency. I should like the Minister to give us an assurance tonight that nobody will be paid off before there has been thorough research into the problem and a thorough springcleaning of the ideas of the Government and everybody else concerned, so that any man who is afraid of losing his job will at least know that everything possible has been done to maintain it for him.

We have a considerable number of things allied to the aircraft industry which could make a profit. I have already said that our design team is efficient. We had a nasty knock over the Canberra. No hon. Member in the Committee needs to be told about the teething troubles of the Britannia. The Britannia is a fine aircraft, and Northern Ireland and the men who are manufacturing it are very proud that it is being produced in Northern Ireland. What Northern Ireland is not proud of is the fact that it is likely that she will have little opportunity to manufacture in the future if something is not done very quickly.

One cannot start off a new idea such as the freighter-cum-trooper—that is a very practical aircraft which would be bought and used by many different people—by building it in ones or twos in the expectation of receiving orders There must be a basic order of a decent size first of all. Then, when the aircraft is really in production we can offer it from Northern Ireland to other countries which require it and will use it for freighting. We can then say that we are proud to work hard and to make a profit—for Great Britain, let it be remembered, and not just for Northern Ireland.

That aircraft is particularly good. Yet very few people seem to be able to make up their minds whether it is suitable. I am aware that the Minister of Supply cannot answer completely on this matter, because all the defence set-up—the Air Council, the Secretary of State for Air and so on—is involved. However, it is getting a little too far behind when I am told, as I was at Question Time yesterday, that this subject is still being considered. We can go on considering for ever. I suggest that we have reached the stage when we must take action.

As far as I can see, we are highly competitive in offering this aeroplane, and we should like to know why the aircraft industry, which is in need of work, cannot get on with providing an aircraft which our defence policy says we need. Surely that is logical.

I want to return to a few of the questions about allied projects which would maintain people in work, not necessarily in the aircraft end of the firms, which would provide employment for people in the other research departments and which, if carried out fully, would also produce a profit which would help the firm to continue in a greater level of employment than seems possible at the moment. I want to know whether the Short analogue computer has been as fully developed as possible and whether it is being pushed as far as we believe it ought to be pushed in sales throughout the world. We could sell it in America and in many other countries in much greater numbers. What about the high frequency motors which Shorts make so well and the low tension stabilised power unit? I understand that only one firm in the United Kingdom make this unit.

I am sure that hon. Members will forgive me if I read the next part of my speech, because I want to make certain that I am giving the information correctly. There is a low frequency oscillator for guided weapons, which I understand could be manufactured in much greater numbers; there is the vectorscope; there is the hydraulic two-axis rocking table; there is the delta modulation which is applied to analogue computer techniques; and there are the potting and foaming techniques.

I am sure that the people involved in the research departments are very anxious to pull their weight. They are intelligent, highly-skilled men who are anxious to stay in Ireland, if they do not come from Northern Ireland, and who are anxious to live and work there if they do.

It is not just a question of the number of aircraft and of whether there will be 100,000 people fewer in the industry in five years' time. We hope that the situation will be thoroughly investigated so that this equipment can be produced where there are the greatest number of men without alternative employment and where the greatest incentive can be given. I believe that in Northern Ireland we can meet all those requirements.

I ask the Government to remember that this is not a new problem about which we have warned the Government. Over many months we have spoken on the subject of dwindling contracts. This is not healthy. It is very bad for a go-ahead concern such as any aircraft industry must be. We say to the Minister and the Government that if this is to be a general slowing down, then it will wreck the whole conception of efficiency and of people wanting to work and to give their best. We are always encouraging our workers and saying that we know they are worthy of anything which they can be given to do. The Government have a very serious responsibility if they have not these things to do.

When this whole aircraft industry of ours dwindles over the next five years, possibly some of the men will have other places to which they can go. I am concerned about men who have no other work to do and who will find it very difficult to go to other places. I very sincerely hope that the debate will have cleared a lot of old rubbish out of a lot of pigeon-holes, and I hope that we shall approach the idea of an efficient aircraft industry by having a spring clean and by producing a satisfactory set of contracts for the things which we need in order to give our people the chance to do other work which they can do after they have finished making aircraft.

8.55 p.m.

Mr. Frank Beswick (Uxbridge)

Every hon. Member who has made a contribution has said that this was a timely and useful debate Now that I have an opportunity to say something myself, I see no reason to disagree with that opinion. We have had an honest and sincere wish on both sides to have a constructive debate. Certainly no one will accuse my right hon. Friend the Member for Belper (Mr. G. Brown) of having gone out of his way to make any party points, although some may have been open to him. He concentrated upon looking at the industry as it now is, trying to decide where we should go from here. I believe that that is the attitude which most of us would wish to adopt.

We are dealing with an industry which at one and the same time has a serious redundancy problem on its hands and also a brilliant future before it. This adds a touch of irony to the situation. I agree with all hon. Members, and they have been the majority of those who have spoken today, who have said that Britain needs a virile aircraft industry. This conviction has been shared by those who look at the industry from the point of view of the employment which it provides. Those who simply wish to see secure, well-paid, clean employment, naturally have a stake in the industry. There are those also in the Committee and outside who regard the industry from the point of view of that mysterious but very powerful factor, national prestige. Although realising that we must contract at the moment, they look ahead to an expanding industry.

There are other good and solid reasons that we should have the aircraft industry well founded and with a successful future before it. The defence requirement is still one reason, despite the commitment being reduced in the immediate future. I should have said that the most important argument of all is the economic one. It is not simply that when we export aircraft we export material of which we have an abundance, namely, the skill and "know-how" of our people. It has been recognised generally in the Committee that, despite all the difficulties in the past and the failures of the industry, it has, in the widest sense, been the pacemaker and, indeed, the inspiration of technical advance in many other fields. In metallurgy, in man-made materials, radar, electronics, servo mechanisms and in many other ways this has been true. In addition to all those reasons, there is the fact that we have already sunk a good deal of national money in the industry. This, in itself, is an excellent reason for trying to reap the maximum benefit from it.

If we are to have a strong aircraft industry and achieve the desired end, we must will the means. If we are to have a national policy in the matter, we must devise the machinery for applying it. I realise that the Minister of Supply, who is here today, while responsible for many matters, is not in all respects the prime mover and there are others of his colleagues to be considered. The criticism which I would offer immediately to the Minister of Supply, however, is that he has not indicated that the sort of thing he wants to achieve is something he is really going out of his way to work for. He has not given the sort of leadership today which I believe the Committee and people outside would have him show.

The need for some Government initiative is nowhere more clearly illustrated than in the employment problem. I agree with what has already been said, that while the Government's defence policy may be right or may be wrong, we cannot alter the defence policy simply to keep certain people employed making some aircraft in different parts of the United Kingdom. The obligation upon the Government in this matter is not necessarily to keep men making aircraft but to find them employment in which they can utilise their skills to the full.

My hon. Friend the Member for Gloucester (Mr. Diamond) made what I thought was an extremely powerful speech looking after the interests of his own people in Gloucester. Nevertheless, even he would agree, possibly, that there is a special case when it comes to Northern Ireland and for several reasons. The redundancy there appears to be the highest. Unemployment there already is also the highest. We are told that 12½. per cent of the people are unemployed. There is another reason, or two other reasons.

First, this aircraft firm was moved by Government order from the Medway to Northern Ireland for the purpose of providing employment in that area. Secondly, it is, after all, largely a Government-owned firm. We have a right to expect from the Parliamentary Secretary some statement today about the intentions of the Government regarding this firm which they largely own. The Ministry of Supply has not played fair with Short Bros. and Harland in the past. I am not blaming the two right hon. and hon. Gentlemen opposite. I am going back over a period of years, and my view is that we have not altogether played fair with that company.

In any case, I hope that the Parliamentary Secretary will be able to assure us that the Government have the interests of that company at heart and that they have some definite policy regarding it. Looking at the aircraft industry as a whole, in the long run the answer to the redundancy question is to find more orders for civil aircraft. There is no other way round it. From a national point of view, I agree with what has been said, that there is no solution in redistributing a shrinking volume of orders to different companies. We have to find what more we can do to help these companies to design, make and sell efficient and competitive aircraft in the markets of the world. With that as our objective, we start with research, although the Minister of Supply put it the other way round and dealt first with the shape of the industry. If we do not get basic research right, we shall get nothing right.

The hon. Member for Cheadle (Mr. Shepherd) expressed surprise when I did not agree that the Minister's statement was as good as all that. I can assure the Minister that his statement has not allayed all fears. It has prevented panic, because many thought that it would be worse. We must give credit to the Minister, because he had a lot of hard fighting to do in order to achieve this much. He has safeguarded the present position and bought time. But he has done little more than that. There is nothing which can be read into the statement which shows how the Government will go forward to build up an efficient industry. Indeed, there is a good deal of contradiction and conflict in it. I will try to show what I have in mind.

The right hon. Gentleman used such phrases as: Finance will be on a scale adequate to enable the industry to maintain a leading position. That is fair enough. That is a fine statement of intention. The right hon. Gentleman also says——

Mr. Shepherd

Research, or finance?

Mr. Beswick

Finance of research. We are talking about a statement which deals with research.

The Minister also says: The future of research depends, therefore, on the progress made by the industry itself. I say again, does the right hon. Gentleman mean that? If this industry, or some element in it, does not come up to our expectations, is that the end of the right hon. Gentleman's responsibility in this matter? I cannot think that he proposes to wash his hands of them all if they do not do as well as he says they must do. He must find other ways of bringing them up to scratch. Indeed, many firms will probably point out, if their success is not as it should be, that they should spend more money on research and not less. Again, in answer to a supplementary question of mine the other day, he assured the House that the establishment at Farnborough would continue, but he also said in his statement: The Government have taken this decision in the expectation that in course of time the industry itself will progressively assume financial liability for this research. What does he mean by that part of his statement? Does he mean that, in the course of time, he will present them with a bill for the cost of the research? Is it to be on a repayment basis, or is he going to have an extension of the system by which the industry pays on successful aircraft a percentage return to the Government? What exactly does that statement mean?

There are some officers at Farnborough who have taken that statement to mean that private industry will progressively assume responsibility for its own programme of research in this field.

Mr. Aubrey Jones

indicated dissent.

Mr. Beswick

The right hon. Gentleman shakes his head, but I assure him that there is a measure of confusion among some honest people—and I am not saying those with whom he has had discussions, but lower down the scale—who are concerned about their security of employment at Farnborough. I assure him that I am trying to be helpful and giving the Parliamentary Secretary an opportunity, if he will take it, to assure the House again that, as far as Farnborough and Bedford are concerned, these officers now employed can look forward to secure and stable employment. I think the hon. Gentleman will be rendering a service if he can give the Committee and these people that assurance.

Again, I agree very much with what was said by the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke), who said that the whole statement smacks of the Treasury. There is no impression here of a long-term policy. The feeling I have, reading this statement again, is one of an ad hoc or piecemeal approach to the whole business. The Government say in this statement that they— will, therefore, continue, as necessary, to sponsor and finance aeronautical research and development to meet these defence requirements."—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 229.] Again, the right hon. Gentleman said, in answer to a Question of mine, that help will be forthcoming, but only if the industry continues to make and sell successful aircraft.

There is one thing that is absolutely certain about this aspect of the matter, at any rate. It is that we cannot have profitable and sustained research on a cap-in-hand basis. If they have to go to the Treasury on each project and have to try to explain to people who may be very clever on financial matters but absolutely ignorant about aircraft, then we shall not only frustrate the individual research officers concerned but will not give the nation the results we want.

There is another reason why I think we cannot carry out basic research of this kind on a temporary and piecemeal basis. We must have a long-term budget for research. There must be a certain amount of basic research going on the whole time, quite irrespective of the month to month or even year by year scrutiny of the Treasury. There is another reason which was given by the hon. and gallant Gentleman the Member for Ely. It may be that research starts off on one idea and there is one line of inquiry but then we find ourselves providing ideas on something completely different. That is what I understand has happened in the case of the Swallow aircraft. That did not start as a project for a transport aircraft as originally planned, but with something quite different. One never knows when one starts on some interesting basic work of this kind exactly how one will end up. I just do not follow how the Treasury can expect that we can justify, at any given point of time, research work that is going on. It is not at all possible to wait for a grant until there is success on some particular and specified project in this very uncertain field.

The Government are being unduly complacent about the way in which private industry has taken over the research and development of new projects. The V.C.10 is described as a private venture, and to a large extent it is. The company concerned is certainly putting a lot of private capital into it. But the engine, without which the aircraft would be an impossibility, is available to the designers only because of Government research and Government development grants. The D.H.121, which is even further away from immediate and direct Government sponsorship, is an aircraft depending to a great extent upon the experience gained on other work which was financed by the State.

It is accepted that we might get by with the next generation of aircraft, but the succeeding generation, on which we ought now to be working, will need a good deal of public money. I should like some more information about precisely what research is being undertaken on the subject of supersonic aircraft. It is not only a matter of conjuring up a design. Much basic research has to be done on related problems such as heat-resisting metals which will be needed for aircraft at the speeds which we are contemplating. I ask the Parliamentary Secretary to tell us something more about what is happening in research and development on the succeeding generation of supersonic aircraft.

Leaving aside for a moment the question of research and turning to the shape and pattern of the construction side of the industry, here again the Minister of Supply is being complacent. We have had reports of mergers, and everybody seems to agree what we have all foreseen for some time that there must be some measure of rationalisation. Superficially, we seem to be getting it. I wonder whether it is only superficially. The consortia which have already been announced have been called shotgun weddings by several hon. Members. I am sure that there is nothing quite so straightforward and understandable about these consortia as there is about a wedding. I cannot think that the present arrangements are even a regular system of cohabiting. They seem to be more of a week-end liaison. There are meetings from time to time between representatives of the different companies.

Will the Parliamentary Secretary tell us a little more about how those arrangements which have been approved by the Minister of Supply are expected to work out? Let us take the example of the Hawker-Siddeley-Bristol merger about which we have been told and which the Minister has approved. I gather that there is a committee representing the two firms and there may now be a company linking the two.

However, there is no genuine integration as far as I can see. The Minister talked about handing out development projects to firms which were good and which did as he told them and got together. To whom will he hand out these hypothetical development projects in the future—to Hawker-Siddeley, to Bristol, or to the company in between? One of the difficulties about this arrangement is that, while we need concentration of units, we are in danger of getting proliferation of companies. We have more committees and more companies to deal with. We ought to have a little more information how the Minister expects these arrangements to work out.

What happens if they do not get sufficiently close together? What power or penalty has the Minister? What has he in reserve? He told us today about his power of the contract, and he rather suggested that there was some similarity with the power which existed before the war when the Bank of England were promising capital to companies in the steel industry. I think he is exaggerating his power if he is relating this power of contract to the power of capital. I would say that there was no similarity at all.

Moreover, in so far as he is successful and there are in future fewer units to which he can go to find his requirements, his power will be decreased. If he succeeds in achieving a pattern in which there are very few units of production and in which we shall probably find only one unit capable of producing one type of aircraft, he cannot say, "I will not give you this contract unless you do as I tell you," because he will not have an alternative supplier available.

Therefore, I put it to the right hon. Gentleman that he is probably exaggerating his capacity to control or to reorganise the industry if he is relying wholly upon this promise of research or development contracts to the industry. In any case, looking at the matter from the administrative point of view or from the point of view of organisation, a much better approach would be not to try to link up a unit in one part of the country with a unit in another part, but to select certain efficient units with a good record of success and to build up their resources in personnel and equipment and provide a solution in that way.

One test example of the way in which the Minister expects things to work out in the immediate future is in the question of supersonic aircraft. I invite him to tell us exactly how this matter now rests, what the next stage is. Who now has responsibility for research on this matter and to whom is responsibility to be given for the next stage? How is that person or body to be chosen? Having said this about the supersonic aircraft, I would like to slip in two observations about matters on which I have some sort of personal prejudice.

I hope that the aircraft industry of the future will not think wholly in terms of supersonic machines. There is a good market in the world for light aircraft, the club aircraft, or machines for crop dusting, fertiliser spraying or bird scaring. Light aircraft can be sold in large numbers in different parts of the world. Before the war, we were able to produce a light engine and light aircraft. It would be a pity if our scheme of things excluded the possibility of our producing something like that in the future.

The other matter is related to this question of speed. I have said in this Chamber before that I am convinced, looking at the matter from the point of view of an airline operator, that in the next decade we have to concentrate on economy and reliability rather than upon speed. I would ask that we be told—we ought to have been told today—what is happening in research on such matters as sucking in from the airflow or blowing out on the flaps, or diverting the jet stream, to enable the aircraft to take off on a shorter run, for example. What is happening towards bringing down ton-mile costs in operating aircraft?

One or two hon. Gentlemen have referred to the necessity for home orders if we are to have an aircraft industry which can export abroad. I would make two points about that. The first is about Transport Command. The hon. Member for Macclestield (Sir A. V. Harvey) was a little unfair to my right hon. Friend the Member for Belper, when he suggested that Transport Command, if it were enlarged, would be cutting out the scheduled civil airline operator. Of course, my right hon. Friend said nothing of the sort. The sort of operator they would cut out, if anyone were cut out, would be those independent companies which now do the trooping for the Army.

Sir A. V. Harvey

I did not say that.

Mr. Beswick

I suggest that the hon. Gentleman read his speech tomorrow. In any case, what my right hon. Friend said, and what I support, is that we need, for many reasons, a larger Transport Cornmand. It is time we were told something more of the proposed further orders for that command. As we are dealing with the R.A.F. requirements, and as the Minister said there were other aircraft besides bombers and fighters that would be needed for the R.A.F. in the future, I would like him to specify in a little more detail what kind of aircraft they are and what is being done about ordering them.

Sir A. V. Harvey

The hon. Member will surely remember that it is quite impossible to get any utilisation for Transport Command for various reasons, compared with those of the civilian operator, who operates for eighteen hours out of the twenty-four.

Mr. Beswick

A lot of operators who operate for eighteen out of the twenty-four hours do not reach 4,000 hours per year. I assure the hon. Gentleman of that. In any case, if Transport Command had more responsibility for trooping it could build up quite a useful utilisation for an enlarged fleet of aircraft.

The other point is about Commonwealth requirements. I have always thought, and so have other Members of this Committee, that it should have been possible at the end of the war to have a united Commonwealth air policy. I was bitterly sorry and disappointed when the Commonwealth Pacific Airline finished. I thought it was a nucleus for a federal structure of Commonwealth airlines, and we ought never to have set it aside. If that is gone, ought we not to make an extra effort to get a concerted Commonwealth policy in regard to aircraft?

What has happened this past week or so is an absolute tragedy. On the one hand, we have offended our New Zealand friends about this business of butter. On the other hand, the T.E.A.L. orders which de Havilland thought they had secured for the Comet IV, seem likely to be lost because of action by the Australian Government. I hope the Minister of Supply will put it to the Prime Minister, no lower, that something extra ought to be done before it is too late to have Commonwealth talks on this matter. And Commonwealth trade is not a one-way affair there must be a two-way traffic in which we buy their products if they are to take our manufactured goods.

Everything I have tried to say about research policy, the planning of work and allocation of funds and reshaping of the construction side of the industry, leads to the question of what sort of authority is to be responsible for this. There has been a lot of argument about this in the past. Some have even suggested that the Ministry of Supply should be by-passed and the responsibility given to the Air Ministry. Whether that had any validity in the past, I do not know. I doubt it: I do not think the air marshals were very successful when they had charge of aircraft procurement. Now that the military requirement is dwindling and the civil increasing, I cannot see that this responsibility could be given to a Service Ministry.

My right hon. Friend put forward interesting suggestions. There is the idea of an Iron and Steel Board type of controlling body or a Minister of Aviation. I am not concerned about what we name the Department, but there is a sound case for giving some Minister—the Minister of Supply or someone else—not only responsibility but power over aviation policy and responsibility not only for the manufacturing of aircraft but airline operating as well. That idea goes into the general pool of ideas, and I trust that some thought will be given to it in future.

If we are to consider the problem of providing finance as well as how to control and plan the industry, I cannot see how we can divorce that from the question of ownership. I cannot see how one can control this industry and direct it from outside. Even looking at it as a functional and not a political problem, I should have thought that there would be great advantage in having some representatives of the Government of the day sitting round the boardroom table and making a constructive contribution there, rather than trying to see how their policy is working out through inspectors on the floor of the shop or through monthly progress reports.

I say again that if we are to have before us some concept of what we want we must also have some idea of the means to that end. So far—and I feel sure I speak for others on this side of the Committee and for hon. Members opposite—we have not had any indication from the Government that their attitude towards this business is positive and purposeful and that they conceive themselves as being prime movers. They appear to be content to set the stage and then see how things work out. I very much hope that the Parliamentary Secretary can disabuse us of that idea and tell us in more detailed terms what the Government propose to do to build up this aircraft industry afresh.

9.26 p.m.

The Parliamentary Secretary to the Ministry of Supply (Mr. W. J. Taylor)

This, I am sure all hon. Members will agree, has been a most interesting and constructive debate. My right hon. Friend and I are glad to have had an opportunity of taking part in it because we believe that the future of this great industry is of the greatest importance, both to those actively engaged in it and to the nation as a whole. It is, therefore, right to take stock of the present position in the industry and to attempt to chart in broad outline its course for the next few years.

The statement which my right hon. Friend made in the House last week was the result of a great deal of work and study. I am glad that it has evoked the thoughtful speeches which have been made in this debate. I assure all hon. and right hon. Members who have taken part in the debate that if I have no time to deal with specific points they have made, their speeches will receive the closest attention by my right hon. Friend and myself. I shall try to answer as many of the individual questions which have been put to me as I can in the time at my disposal.

First I will make some reference to the contraction of the aircraft industry, which has been the subject of considerable emphasis in this debate. I wish to say a few words about this and to make an attempt to put the matter into true perspective. It is a fact that the years since the time of the Korean rearmament have been exceptional years for the aircraft industry. Throughout that period the industry has been very largely engaged upon the development and production of military aircraft, as a result of which its labour force has expanded from 150,000 in 1951 to about 250,000 at present. I therefore feel that the contraction which we now foresee is more of a return to normal circumstances, and the future success of the industry will depend largely on its efforts in the civil field.

As my right hon. Friend has said more than once in the House, the contraction will be gradual, and spread over several years. The industry, therefore, has some time—although, I agree, not too much time—to adjust its organisation and activities to meet the new situation. Some hard decisions have to be taken which will call for courage and foresight, but I believe that, given courage and foresight, this difficult transition can he carried out smoothly.

What should the industry do about this? There are two main steps that we believe it should, in its own interests, take. First, it should reorganise itself into larger and more powerful groups of companies. We urge this because we believe that it is the only way in which the British industry will be able to compete efficiently and economically with the very large units of production that now exist in other countries, and also because of the increasing complexity of future aircraft projects, which only companies that are strong, technically and financially, and able to be responsible for a wide range of programme to ensure continuity of their research, and of their research and production facilities, will be able to undertake.

Secondly, we urge that the firms engaged on aircraft work should seek, so far as possible to diversify their interests and engage in complementary fields of development and production. My right hon. Friend and I are glad to note that some progress has been made on those lines, and with our approval; and we hope—indeed, we more than hope, we are anxious—to see much more of this progress during the next year or two.

Reference has been made to the level of research and development expenditure. The bulk of the fundamental research work in support of the aircraft industry will continue to be done at Ministry establishments such as the Royal Aircraft Establishment at Farnborough, and the National Gas Turbine Establishment at Pyestock. That is the answer to one of the questions asked by the hon. Member for Uxbridge (Mr. Beswick) about the future of Farnborough and Bedford in particular. I can assure him that the establishments at those two places have a continuing future in military and civil research, and in work connected with unmanned aircraft. I am glad to be able to give the hon. Gentleman that assurance.

To return to the level of the present programme, it is, of course, a compromise between what we should like to know and the resources that we can devote to the search for knowledge; and, of course, today's answer is not necessarily right for the future. We have to make up our minds as best we can, in accordance with the circumstances ruling at the time and on the basis of the best forecasts we feel able to make in consultation with our friends and colleagues.

The programme of research and development will be kept continually under review. I cannot say too strongly that there is no intention of handing over this basic research work to the industry—that is, the work carried on in the main Government establishments. As I have said, we have made our decisions, and have set the level as best we can in accordance with today's circumstances.

I cannot forecast the future level of Government expenditure on research and development, particularly in industry. As my right hon. Friend has said, it is the Government's intention that industry should increasingly bear the financial responsibility for the development of new civil projects, but we recognise that there may in future be certain special projects for which a measure of Government assistance would be essential. As my right hon. Friend's statement said the other day, special cases will be considered on their merits. If I have time I shall say one or two things about the supersonic airliner project, when I shall deal in more detail with it. That is a good example of the type of special case which we expect will come forward.

Mr. Beswick

Before the hon. Gentleman leaves that point, would he be good enough to explain the part of the statement in which it says that …in course of time the industry itself will progressively assume financial liability for this research".—[OFFICIAL REPORT, 13th May, 1958; Vol. 424, c. 229.] It was the basic research. Does it mean that this will be done on a repayment basis, or what?

Mr. Taylor

That is a matter where only experience can tell us how best to apply the policy.

It has been repeatedly said today that no specific figures have been given which distinguish military research from civil research. It is impossible to give those figures at the present time, let alone to make accurate forecasts for the future.

Mr. G. Brown

May I try to clear up this point, which is important? The statement is a firm statement. It says that the responsibility for the cost of this research will be passed over to the industry in the future. The hon. Gentleman says that we must wait to see what circumstances teach us about it in the future. Does the statement mean what it says, or does it not?

Mr. Taylor

When it is economically feasible for the industry to absorb the expenditure incurred in fundamental research, that will be the time to assume responsibility. The time is not now.

My right hon. Friend has said that it would be impossible now to place upon the industry a burden which it cannot in fact bear, but when the time comes it will be expected to take over that business.

Mr. Brown

In what form?

Mr. Taylor

We shall have to see what methods are applied. The principle has now been stated and, we hope, clearly established.

Reference has been made to matters which affect individual constituencies. My hon. Friends from Northern Ireland have made a very strong and powerful case for the firm of Short Brothers and Harland, the position of whose order book has deteriorated considerably over the last few months. I sympathise with them very much. I know that my hon. Friend the Member for Belfast, West (Mrs. MacLaughlin) said very powerfully that sympathy was not enough, and I agree with her. I wish that I had more in my brief case to give than sympathy; but the Government are conscious of the difficult employment situation created in Northern Ireland, and my right hon. Friend has recently received a deputation from some of the hon. Members concerned and from the shop stewards of Short Brothers and Harland.

I remind the House that by far the greater part of the work on Ministry of Supply orders for the Britannia has been undertaken by Shorts. We all hope very much that the Britannia will be successful in attracting further commercial orders. However, my right hon. Friend has no control over the placing of such orders either on behalf of the aircraft Corporations, or of overseas buyers; or, indeed, of the Service Departments until we have received a requirement. Short Brothers have, however, received a valuable order for the development of a small ship-to-air guided weapon. If this development is successful, it could lead to still more valuable production orders extending over a number of years.

I say most seriously that we recognise the difficulty of the problems in this area. I assure the hon. Members concerned that all practical steps will be taken in an endeavour to maintain the firm as a fully balanced aircraft design and production unit.

Mr. Beswick

What does the hon. Gentleman mean by that?

Mr. Taylor

The hard fact of the overall contraction of military orders cannot, however, be avoided and the future of this firm, as of all others, must depend to a large extent on the success of its own efforts to find and develop new and worthwhile projects. With regard to the list of civil items which the firm produces, and produces very well, there is nothing whatever to prevent the firm going out and increasing the number of orders for those products. In fact, the management has a responsibility so to do. It is not the responsibility of my right hon. Friend to go out and get orders for this individual firm, any more than for any other firm engaged as contractors for a Department or for the Government in any other sense. We hope very much that it will be possible to increase the order book by getting orders from outside, but my right hon. Friend is limited in what he can place by the requirements placed upon him by the Service Departments.

Mr. Beswick

The hon. Gentleman says that it is up to the firm to go out and do this or that. Has the Ministry of Supply or the Government a representative on the board? Has that representative on the board made any suggestions as to whether the firm should go out and get these orders or do anything else?

Mr. Taylor

Yes, indeed, it has representatives on the board. Those representatives are, I am sure, conscious of the responsibility which lies upon them. The day-to-day management, however, devolves on the board. I hope the board will agree that if anything can be done to alleviate the position at Short Brothers by extending its sales organisation, hotting up its processes, or whatever it might be, to get orders, it should be dealing with this as a matter of first priority. [An HON. MEMBER: "Fine words."] I have no orders and my right hon. Friend, as Minister of Supply, has no more orders to place with the company.

Mr. Knox Cunningham

My hon. Friend said that the Government would take all practical steps. Is that without qualification or is he saying that the Government will take all steps within their power? I should like this matter to be cleared up.

Sir A. V. Harvey

Before my hon. Friend replies, may I ask whether there is anything to prevent Short Brothers at Belfast, as a Government-controlled company, manufacturing other equipment and aircraft, the same as Hawkers have done?

Mr. Taylor

In reply to the latter point, there is nothing to prevent Short Brothers and Harland going out and doing such a thing. In fact, we would commend it very much if they did so. In reply to my hon. Friend the Member for Antrim, South (Mr. Knox Cunningham), there are two responsibilities. There is the narrower responsibility of my right hon. Friend and the wider responsibility of the Government as a whole. In this context, I can deal only with the responsibilities of my right hon. Friend. I assure my hon. Friends from Northern Ireland, however, that the matter of the wider responsibility has received, and continues to receive, the most earnest consideration of the Government as a whole.

Mr. Mikardo

What are the "practical steps"?

Mr. Taylor

I could go on dealing with the questions in this difficult area until the end of the debate, but I should like to reply to the points made by the hon. Member for Gloucester (Mr. Diamond). Here, again, a difficult situation is arising with regard to employment. The situation arises in the main through the decline in the requirement for military aircraft. I regret very much to say that I cannot see any prospect of any major Government production order for the Gloster Aircraft Company after its present order for Javelin fighters has been completed. We have given what assistance we can to the company by allowing it, in agreement with the Air Ministry, to reduce its rate of production so as to spin out its work.

Eight or nine months ago there was an Adjournment debate, which I am quite sure the hon. Gentleman the Member for Reading (Mr. Mikardo) will remember, in which I dealt with this matter at considerable length. We have spun out the work, and we have given the redundant workers a better chance of finding other jobs by so doing. The future of the firm must, as in other cases depend on the success of its own efforts in seeking alternative work both inside and outside the aircraft field. This particular firm has one great advantage in that it is a member of the Hawker Siddeley Group, a powerful group which has diversified its activities a great deal over the last year or two, and now has broad interests in fields far wider than the aircraft industry itself.

The hon. Gentleman the Member for Uxbridge referred to the question of supersonic civil air transport and asked me what was being done about it. A programme of intensive research is being carried out into the various possibilities for a supersonic civil transport aircraft. The main airframe and aero-engine manufacturers are engaged in this research under the direction of the Royal Aircraft Establishment at Farnborough. That answers the question put to me about who is responsible.

The programme will continue so long as it is necessary and fruitful. If it is established than a supersonic airliner can be an economic proposition, consideration will then be given to the question of its development. We appreciate that if such an ambitious project were embarked upon it might well prove to be one for which some Government aid is essential. No one doubts that a supersonic transport aircraft is feasible. That is entirely beyond doubt now. The problem is whether it can be economic. A joint study of this is being made by the industry and the Royal Aircraft Establishment at Farnborough and we hope for an answer in about 12 to 18 months. That is the state of progress. If the answer is favourable, it will then be a matter for arrangement with suitably powerful groups manufacturing airframes and engines to produce a practicable design, and it will be at that point that the question of Government assistance will arise.

I should like to mention one or two points about guided weapons because I think that there is in some quarters a misconception about the scale on which this work is being done. We often get requests from hon. Members for orders for guided weapons for works in their constituencies. This indicates to us that there is misconception about the scale on which orders for these special, newer weapons can be placed. Several of the major aircraft firms, as the Committee knows, are engaged in the research development and production of guided weapons. This work has been taken into account in making our estimate, on the basis of Government orders, that the aircraft industry will decline by 8 or 9 per cent. per year over the next two years.

Although some substantial orders have been placed, these weapons are not, in their nature, required in enormous quantities. Therefore, this work will not go far to make good the decline in orders for military aircraft. There is, I Am glad to say, a prospect of obtaining additional orders from overseas for our guided weapons, and the Government are very conscious of the importance of this both from the point of view of the industry and because of the wider advantages, both economic and political, which are offered by the policy of interdependence. We are doing everything possible to convince our friends in N.A.T.O. of the virtue of taking advantage of our achievements in this field. The firms concerned are pursuing a vigorous export drive. This is not the easiest field in which to sell one's products, and I am sure that hon. Gentlemen will agree with me that any encouragement that we can give as a Government, or as a Committee, we ought to be only too glad to give.

The hon. Member for Uxbridge asked me about the co-ordination of civil aircraft responsibilities. He suggested that the Government's responsibilities in research and development for civil aircraft and for the nationalised Corporations should be co-ordinated under a single Minister. There are many subjects within the field of Government administration where responsibility lies partly on one Minister and partly on another or on several Ministers. The problem of co-ordinating Ministerial responsibility for these subjects is a real one. On a preliminary examination, it often appears an attractive solution to place all the related aspects of the subject under one Minister. There are, however, many considerations involved, and the problem is to decide where the balance of advantage lies. Research and development for civil aircraft has been, and will always be, although to a decreasing extent, closely bound up with research and development for military purposes.

The suggestion to put all aspects of civil aviation and the aircraft industry under one authority, if adopted, might make it easier in some respects for the administration of Government policy, but it would raise—I hope the hon. Gentleman will appreciate this—a number of new and more difficult problems of co-ordination beween civil and military aeronautical matters. The military side includes guided weapons, and the suggestion which the hon. Member made is, I feel, if looked at carefully, only superficially attractive.

The hon. Member for Reading asked about the use of scientists who have been made redundant. My right hon. Friend is already in consultation with the Lord President of the Council and the Minister of Education about the possible use of not only scientific and technological staff but Government research facilities and the general scientific progress of the country, and I can assure the hon. Gentleman that sight is not being lost of the points which he has raised.

The hon. Gentleman also raised the subject of manufacturers giving adequate notice to work people about redundancy. The hon. Gentleman will know that in the Ministry we are meticulous about matters of labour relations, redundancy and so on, and, of course, we approve his suggestion that the maximum notice should be given. We shall follow up the policy which is natural to our Department by persuading manufacturers when they are bringing work to an end to be as generous and as helpful as possible to the people whom they have to discharge.

Mr. Mikardo

I am grateful to the hon. Member for what he has said, but the Ministry has been persuading for a long time and many manufacturers take no notice of the persuasion. I am asking whether the Ministry could not reinforce their persuasion by some medicine a little tougher. Will he do something about it instead of just talking?

Mr. Taylor

We give the maximum notice, where possible, where we are bringing a contract to an end. In doing so we emphasise not only by letter but also by personal contact through our officers the strong views which we hold about giving maximum notice to people who are likely to be affected by the decisions which have been taken.

Mr. Mikardo

Will the hon. Member tell the firms that if they do not do what he asks in that respect they will get no more contracts?

Mr. Taylor

If the hon. Member had listened to what I said earlier lie would realise that there are not many more contracts to be placed, but I will bear in mind what he said and I will consider what might be done to carry out what he has suggested.

In the few minutes which I have left I want to try to clarify my right hon. Friend's policy in the matters which we have been discussing today. I have noticed that hon. Members seem to find a difficulty in understanding, or at any rate interpreting, the statement of policy which my right hon. Friend has made.

I would summarise the Government's policy as follows: to maintain an aircraft industry in an efficient way; to take action to mitigate the effect upon the industry of a sharp change of military policy; and, as a means to these ends, to maintain an adequate research programme upon which the future of both the military and civil programmes of the Government and of the industry depend.

Our policy is, further, to leave with the industry the cost and risk of the development of transport aircraft, except where special circumstances exist, in which case a Government investment will be considered on the merits of the case. We further wish to use the power of Government influence and contracts to help the process of reorganisation upon which the industry is already engaged. Finally, we seek to help both management and labour, as far as possible within the framework of Government powers, to pass successfully through the present period of transition.

All the points which I have made—and there are many more which I should like to make—will, I hope, lead to a better understanding of the problems which face the aircraft industry and of some of the problems which face my right hon. Friend and the Government. I believe that the next few years will be years of great opportunity for the aircraft industry. I feel that it is wrong to take too gloomy a view upon its future. On a conservative estimate, world air traffic is expected to double between 1955 and 1961 and to double again by the end of 1967. The world's airlines will need thousands rather than hundreds of new civil aircraft to carry this increased volume of traffic. I believe that, if the British aircraft industry receives the support of Parliament and the support——

It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress; to sit again Tomorrow.