§ 3.43 p.m.
§ Mr. George Brown (Belper)
Today we are to have a discussion about the affairs of the aircraft industry, an industry which is one of our most vital and important from any point of view, and which, quite apart from the issues of national policy, involves the livelihood of a very large number of people. This industry employs about a quarter of a million people, it has many of our best technical experts in its design teams, and it has some of the ablest, toughest younger executives that are to be found in the engineering industry.
We are discussing it, however, because, to quote the Minister of Supply, it is an industry which, for all its importance, is in a very sad state. It is an industry whose affairs, the Minister said, cannot bring a touch of satisfaction to the breast of anyone. That, as The Times leader says this morning, must be the text from which any of us speak.
596 On any of the industries that have a good deal of defence content, there is inevitably a tremendous amount of secrecy. Under the present Government, there has been far more than a necessary amount of secrecy. One must assume that locked in Ministers' breasts is a great deal of knowledge that is denied to the rest of us. If Ministers, with all the information which is locked in their breasts, do not feel any satisfaction at all about an industry of this size and importance, for which they have been responsible so long, one can only conclude that we are dealing with a serious situation indeed We should face it in that way.
One of the difficulties about discussing an industry of this nature is the peculiar fiction that is growing up as to what is political and what is non-political. I often listen to right hon. and hon. Members opposite, who seem to have a simple way of deciding this. If the industry concerned is publicly owned, and one can suggest that it has not been making the profits that it should, or anything else, one blames that on to nationalisation, and that is a non-political observation. If, however, the industry concerned is privately owned, and receiving vast sums of public money and getting into a very difficult situation at the end of it, and one draws attention to it, that, I gather, is a very political observation.
Clearly, I am running a risk today when we have before us a private enterprise industry and we also have Government responsibility. It is no use pretending that the faults, if faults there be, the disadvantages or the suffering, or whatever the inadequacies are, can be laid at the door of nationalisation. Therefore, I cannot take the non-party line of attacking nationalisation. I must take the highly political line of making observations about how private enterprise itself comes off in this case.
Despite the workers in the industry, the first-class nature of many of our most highly-skilled workmen employed in it, the ability of our technicians and our design teams, and the ability of many of its executives, the fact has to be faced that this industry is one of the lame ducks of private enterprise. The aircraft industry is today a lame duck industry by any test. It has not gone short of public money. It has had vast amounts of it.
597 Somebody said the other day that about £3,500 million has been put into the ordering of aircraft over a period of years, 85 per cent. of which has been on military orders.
The other day, the Minister of Supply, when answering one of his hon. Friends, said that £550 million of public money had gone into research and development work in this industry in ten years. Therefore, it cannot be said that there has not been a very great deal of involvement of the public purse in supporting this industry, far more, in fact, than could by any stretch of the facts be said to apply to any nationalised industry.
When discussing the industry, many people now seem to suggest that all that one need say is to give an assurance to the industry that the Government will continue to support it, by which is meant, I gather, that the Government will continue to dole out these large financial subsidies or grants of one kind or another. I read the speeches that were made in another place the last time a debate on this subject was held there, when a whole succession of chairmen of the various large enterprises involved in this industry stood up one after the other and the burden of their whole story simply was that the uncertainty in the industry could be resolved if they could be assured that the Government would go on standing behind them financially.
I will say later what I feel about the nation's continuing financial responsibility in this field. I am, however, bound to put it on record, to begin with, that to suggest that that is all that is required, in the light of what has happened over the past, and all the public money that has been available, is to miss all the essential problems in this industry.
The industry has, of course, had some successes. I do not want to underplay that by any means. After all, an industry could not justify itself if it had no successes. The truth of the matter, however, is that it has had surprisingly few successes. Indeed, I read the other day a lecture given by, I think, Lord Douglas of Kirtleside, in which he pointed out that only three airplanes that we have produced during this period have been sold overseas in even a minimum number that could entitle them to be called successes. He mentioned the Viking and the two different marks of Viscounts. It might 598 be possible to add to that the Britannia, except that one is not comparing like with like, because the Britannia has been backed by a tremendous amount of deliberate Government purchasing and Government support.
When we talk of this industry making a £150 million a year contribution to our export trade, that is very good and I do not decry it any more than when I last spoke on this subject. But let us bear in mind what a narrow field this has been earned in—among airframe firms. If we take out the one aero engine firm of Rolls-Royce there is very little left to spread among the other aero engine firms as evidence of their contribution on this side.
On the military side, there have also been surprisingly few successes. There have been some, but there has been a tremendously long list of failures and, perhaps as bad, of incredible delays and time-lags. There is no need for me now to go over all that ground again. We did it when we last debated this subject in the House. Hon. Members have only to refresh their minds by looking at the Select Committee's Report on the industry to see the position there. It is pointed out again by the announcement made during the last week or so.
I saw panegyrics by the Air Force, who said that the first squadron of Sea Vixens had now arrived in service. This was hailed as something tremendously new. The Sea Vixen has been reported on and claimed credit for by Ministers again and again for what must be nine or ten years. Similarly, we are told that the Lightnings should be in squadron service by the end of this year. We get very suspicious whenever the Government use the words "should be". We know by now that it often means "will not be". Even if they were in service by the end of this year, that is seven years after the first P.1 flew and it is, again, nine or ten years since the job was really begun.
Against that story has to be set the financial story, which is quite a different one. It is a long history of capitalisation by the industry of the public assistance that it has received, of the making of bonus capital issues on a fantastically large scale, and the subsequent payment of quite large dividends on the capital which has been watered many times over 599 with the aid of public assistance. We do not need to be told that this is just Socialist sniping. We have the authority of Lord Hives. Hon. Members will have writ very large in their minds his remark that "the only thing that many companies have produced has been a good balance sheet". This is the situation and not an unfair picture of the state which this industry has got into. Clearly, one cannot claim that the failure to subsidise it from public funds has been either an explanation of its difficulties, or any guarantee of success by it.
The Government, on their side, now allege, and the Minister of Supply has been alleging for a long time, that part of the trouble is that there are too many undertakings in the industry. He went so far a year ago as to commit himself as to the number of airframe firms and the number of aero engine firms that we could support in this country. I think that it was four or five in the case of the former and two in the case of the latter. Several other people have used figures of the same kind. The fact remains that it does not happen, it has not happened, and it is not happening now, although some coming together—I use that phrase rather than merger, or rationalisation—has taken place; but whether that coming together has been in a form to ensure that both can remain financially in being rather than anything else, is a suspicion which I have very much in mind.
In its turn, the industry has blamed the Government. It says that there have been too many changes of mind by the Government. It says that on the industrial level there has been too much interference and too great an attempt to supervise. I was told the other day by one of the executives in the industry that this business of having numbers of inspectors and accountants inside the factories, far from producing any real checks or aid, is acting as a very considerable brake on effective work inside the industry.
On the other hand, the industry says that the Government have no clear policy about what they want from the industry, or what kind of industry they want to produce it. I do not know whether this joint slanging between the Government and the industry is getting us very far, but I know that it is having 600 two effects. Good firms—efficient undertakings—are resenting very much, and leaving one in no doubt about it, the extent to which other companies in the industry are "getting away with it", as they put it—getting away with large financial cosseting without, in fact, producing anything that can be called industrial success.
I think that the young designers and other technicians in the industry, and the workpeople, who are all doing their best so far as they are able to do it, resent very much the slur that they are working in an inefficient industry when they know very well that, in so far as they are given a chance, they are not inefficient. Quite apart from any other reason for bringing this to a head, there are very great risks that if we do not do something about it the morale of the industry will get considerably out of hand.
It is my case that there is no confidence that the Government are mending their ways at all, no confidence of any real change in the Government's attitude and approach, and no confidence that the industry is able, by itself, to rationalise or radically change itself in the way that has constantly been urged upon it by the Government and by others. In other words, the Government say what is wrong with the industry and, clearly, the industry is unable to put that right. The industry says what is wrong with the Government, and it looks as though the Government are unable to put that right. It is becoming frightening when one looks at what has happened.
The Minister of Supply, last year, talked—as he has done since—about the rundown in this industry to pre-Korean levels. He said that our rundown in employment was about 20,000 a year. Looking at the figures for last year, I see that the actual decline in employment, if the figures given to me are correct, is not more than 8,000. That means, as I understand it, that the industry and the Minister are both forecasting a fall by 40 per cent. in the volume of work and the requirements and the size of the industry by about 1962. That is on the air frame side.
I am told that the figure for the aero engine side is somewhat less, about 10 601 to 15 per cent. Since both are forecasting a drop of that order, we are laying up for ourselves an almighty crash towards the end of the period, or, alternatively, the Government will dash along to stop that by shoving in ambulance work—there are already signs of this—which does nothing but intensify the problem that we are facing.
I think that there is a good deal of evidence that firms even today, with all "the warnings and with all that they themselves claim to know and suspect, are desperately hanging on to teams which they are unwilling to break up and let go because of uncertainty about what Government policy will be, and the thought that they might need these people at some future time and that there will be a contract which they can get if only they can keep the design teams together and the other resources behind them.
So far as the workers in the industry are concerned, we are running again into the situation which we have found again and again, of people lecturing the trade unions for being unable to face inevitable problems, and for clinging to restrictive practices for fear of redundancy, when the fact is that neither the workers nor the unions are ever given enough advance information to have a rational, planned operation. We are asked to be responsible, when all that happens is that a trade union official is expected at the very last minute to go along to his men and assure them that there is nothing for them to do but to accept the sack quietly and look around for work somewhere else. If we were given advance knowledge and planning were carried out with sufficiently advanced timing, we could assist in this problem.
Meanwhile, there is no sense of purpose in any of the current Government decisions. I am not going into many details today, because they have been raised many times before and, no doubt, other hon. Members will raise some of them in this debate, but I will give one or two examples from among the military transports. I fail to see what sense, in terms of the industry, its long-term operation and its long-term prospects, there is in the decisions taken. Nor am I quite sure what decisions have been taken.
602 We are told that the AW660 is to be the tactical freighter. What stage has it reached? I am not very clear whether production orders have been given for this aircraft. What are they? What sort of orders have been placed? One of the difficulties with all the Ministers is that they talk about what they have in their minds so charmingly and engagingly that one is left assuming that they are doing something, but then one discovers, a year or two years later, that they were only canvassing ideas. I think that the Minister of Supply or the Minister of Transport and Civil Aviation should come clean and tell us what the position is about the AW660, the Argosy, what orders have been given, what the engines are to be and exactly what the set-up is for that.
Then there is the Britannic, the other freighter. It is difficult to see why we chose that, in any case, either to make any contribution to the long-term position of the industry and to our competitive sales position overseas, or, indeed, any aspect of the real requirements of the Army. I would say that the decision to order it was about as foolish a decision as could have been taken. If it was taken to put work into Northern Ireland just because Short and Harland's are associated with Bristol's, I can see no relevance in that at all. There is no reason why Short and Harland could not have made another aeroplane in Northern Ireland, or parts of another aeroplane. The same machines and the same people are used, and if there was to be sub-contracting there could have been sub-contracting for anything else.
I have never seen the case for this. I should like to hear it from the Minister of Supply, who comes along so pathetically to us almost every week and says. "I have no power to command orders." Indeed, I thought, when he last said that a fortnight ago, that it was a major understatement, for he seemed to have no power to do anything, but was only the tool of much more powerful Ministers around him. However, since he is to speak today for the Government, I should like him to state the case for ordering it rather than ordering the other possible machines which were available then. Apart from that, I think that it is time we knew when it is expected to arrive.
603 Of course, the Minister of Defence is in difficulty, not for the first or last time, I imagine, but he or his right hon. Friend should tell us about the actual time schedule, and when we can expect this aeroplane. When do the Government expect the Britannic to be in service? What stage has it reached now? Has it been ordered? What orders have been placed? I have grave doubts whether we have, in fact, got very far down the schedule here at all. One has only to see, as I have been able to see, the silhouette of the proposed Britannic placed over the silhouette of the Britannia to realise that the association between them is more tenuous and coincidental than we had been led to believe from Answers from the Treasury Bench.
If the Minister of Defence has tied himself to the idea of mobility for a small Army, mobility which is important immediately after the end of 1962, and if we have not got that mobility, then he will have an Army which he has planned for the purposes for which he has planned it without the essential means of operating it for those purposes and in those places; and in view of the loss of our bases overseas and the air barrier problem, there are many reasons why mobility over long range is tremendously important.
It is a matter of more than passing academic interest to know whether this plane will be in service in 1962, 1964, or, as I suspect is much more likely, 1967 at the earliest. I think that the Government ought to tie themselves to what they have planned here, otherwise it looks to me as though we shall certainly have a period of nakedness, and of inability to move our forces, which will be cursed, I have no doubt, by whoever follows the right hon. Gentleman as Minister of Defence in the period from now beyond 1960.
Speaking for myself, I have a feeling—I confess it very freely—that probably the right decision here was politically a very inconvenient one, that probably the right decision was to go ahead with a tactical freighter, since we wanted only a dozen or thereabouts, and to have bought what already existed in the world for that purpose. I have a feeling that that was probably the correct decision.
604 It would have got us our mobility when we needed it and it would have done the job when we needed to do it. Politically it was not a convenient decision, because it meant buying those few from America. I think that one must say one could not have expected that decision to be made by the right hon. Gentleman, but even if that decision was felt, by those whose responsibility it was to take a political decision, to be too difficult to take, I still say that I think there were other aeroplanes which could have been ordered which had much more to be said for them than this one.
I should like to know, incidentally, what market the Minister of Supply thinks there will be for a civil version of this in 1967. Whom does he see willing to buy it?
§ Mr. Brown
I was not asking my hon. Friend. I have a great admiration for him, but he did not place the order, or take the decision. I am clear that he would not have taken such a decision.
I am entitled to ask what was in the Minister's mind, because he must have thought of this and must have thought that there would be a market. Otherwise, we shall produce an aeroplane for which our total requirement cannot be more than a dozen—can it?—cannot be much more than that, and which, I would have thought, will cost us, in the end, £10 million to £15 million apiece, if it is to have no other purpose. However much it costs, it cannot be cheap.
I turn to fighting planes, and mention only one. The decision there seems to me to be equally peculiar, if we were thinking of long-term possibilities in this industry. I refer to the decision to proceed with the plane known as the TSR2. I have not hidden my view here either that the right decision almost certainly was to have had the NA39 as equal to the Royal Air Force requirement, and to have pushed ahead with it and got it, for many reasons, not least among them the fact that that plane again could be got very much sooner in that form.
We are in the position—the Minister of Defence, I am sure, cannot deny this—of carrying on with the Canberra for the low-level work, when everybody who has had anything to do with it knows that it 605 is considered at best unsuitable for the job, and that its flying even at low level and in exercise has to be rigidly controlled. The sooner we can replace this with a low-level strike aeroplane for the job the better, but it will be 1969 before the TSR2 is in service, if ever it is in service, and that means relying on the Canberra jets for this rôle, for which we have not got the plane to do the job. I think that it is extremely questionable whether that is a sensible decision to have taken.
The only reason I can discover why the TSR2 was refused was that given me by a very distinguished Service man, who said, "You have to understand that there is one label which, if it is ever attached to anything, destroys its validity". I said, "What is that?" He said, "N.I.H." I said, "What is N.I.H.?" He said, "Not invented here." Once the R.A.F. had put the label "N.I.H." on the NA39, then the TSR2 had to be the only possible chance.
Will the Minister of Supply come clean on this, too? The assumption is that there is such an aircraft. It does not physically exist, but we know its limitations, what it can do and what its purpose is, and in that sense it exists But does it? It is a long time since [...] was announced that we were going on with the aircraft. Can the Minister say that the aircraft exists in that sense? I am not an expert on the stages, but I understand that there is the operational requirement stage, the detailed specifications stage, the design study stage, and all sorts of stages. At what stage is the TSR2? Unless we know that we cannot form any view about when we shall get it.
Our best time from first flying to operational use in service seems to be about seven and a half years. How far is the aircraft from the first flying stage'.' I believe I am right in saying that it does not even exist yet, that it is not much more than a conception of ideas which change every time the members of the Air Council have another look at the possibilities of warfare ten years' hence. Until we get over that stage, this is a rather shocking situation.
Meanwhile, there is not only our own situation to be considered. I come back to the aircraft industry and its relevance 606 to that. It is a fact that we are losing chances of orders. A very distinguished industrialist in the industry said to me today, "The tragedy is that we have lost every N.A.T.O. order. We are getting beaten all the time". Had we had a low-level strike bomber which had been ordered by the Royal Air Force, the chances of the Germans taking it, and, certainly, of the Canadians taking it, would have been very much greater. But we cannot go to another air force and ask it to take an aircraft which we ourselves are not taking, for it means that it has to set up a whole line for itself as a first charge to deal with supplies, services, replacement parts, and so on. I believe that this decision has very much increased the difficulties on that side.
I propose to say very little about the civil side, because my hon. Friend the Member for Uxbridge (Mr. Beswick), who will wind up the debate from our side, is much more an authority on that than I am. We are, however, bound to ask the Minister to explain the present state of the confused game with regard to the DH121. There has been ordering and counter-ordering and movement and counter-movement over this. We ought to know what stage the game has reached and what will happen there in regard to the air frame and the engine. A lot of rumours are circulating around my constituency about the engine for the DH121, and we ought to have that matter cleared up.
I have another question to ask on this subject. I cannot understand why the Minister of Supply intervened to order, or to get ordered, the three Handley-Page Dart Heralds. The purpose of that puzzles me very much, unless it is a piece of ambulance work for Handley-Page, and ambulance work has been done for Handley-Page from time to time over the years. It seems rather peculiar, because I am now told that Handley-Page is rushing out advertisements all over the place for other people's employees to come and build the aircraft. Beyond that, I cannot see what the purpose of the order is, nor am I very clear about the financial responsibility of the Ministry for purchasing the aircraft and operating it. I should very much like to know that.
As I say, this is a crisis point for the industry, because, apart from the general 607 build-up, there is the other factor that just at the very moment when order books are very small and getting smaller, either because fewer of these new aircraft are built or because there are cancellations, the requirement for investment in technical research and development, and so on, becomes very much higher. This is a growing problem in the industry, and it will grow very much larger.
We shall require much more money at one end of the scale with a much smaller output on which to recoup it at the other. I suspect that either a great deal more public money will have to be put into the industry in an unplanned, disorganised way if the present situation continues, or that in four years' time there will be an almighty crash which will be a tremendous nuisance to those engaged in the industry and a very great disaster to the country.
What ought to be done? Obviously, an Opposition can only list ideas. The Government have the information, but they sit tight on it. Therefore, I can only put forward to the Committee some views of my own and of my right hon. and hon. Friends, none of them new but some of them with a very large degree of respectable outside support. However, one thing which none of us can make up for is a Government who will not make decisions or, in the very few cases where they do, consistently make wrong ones. This is true of the present Government and that is the real problem; and the only remedy for an incapacity to make up one's mind or an incapacity to hold to one's mind once one has made it up is to get out of the way and let somebody else do it. I believe that that is probably the real remedy for this situation.
I will now put forward some ideas. First, I should have thought that it was true without any doubt that Government machinery for dealing with this matter needs overhauling. There are, it seems, five Ministers who must be concerned in the affairs of the aircraft industry. There is the Secretary of State for Air, who is concerned as one of the users. There is the Minister of Transport and Civil Aviation, who is responsible for other users and for facilities. There is the Minister of Supply himself, who, if his 608 own story is to be accepted, is responsible for nothing but acts as a post box between his Ministerial colleagues and as another post box between them and the industry.
I have many times resisted my right hon. and hon. Friends who have said that there is no case for a Ministry of Supply. I have never been sure about that, but I am bound to say that if the present Minister continues to say that his function is what he says it is, then I shall become a little more convinced that as things are there is no case for a Ministry of Supply. However, at the moment the Minister of Supply is in the field, somehow.
Then there is the President of the Board of Trade, who is the man responsible for our overseas sales and for our credit policy, which becomes an increasingly important policy as we face much more vigorous and sometimes—let us not mince words—almost unscrupulous American pressure in this field. The whole question of the terms on which we can offer things overseas takes on an enormously increased importance.
The Lord President of the Council must be in it somewhere, for some of the research must be his. Over all these five Ministers, if that were not enough in this confused situation, there hovers the shadow of the Defence Minister, who, as far as I can see, when anybody else makes up his mind steps in and changes it and also changes his own frequently into the bargain. So there are six Ministers, none of whom is co-ordinating the others and, as far as I can see, all of whom are very much in each other's way
§ Major H. Legge-Bonrke (Isle of Ely)rose—
§ Mr. Brown
We shall be glad to have assistance from the other side of the Committee, because we do not wish to make all their speeches for right hon. and hon. Gentlemen opposite. If they can add to this catalogue of gloom, we shall be delighted, because we have no proprietorial vested interest in it.
The Chancellor of the Exchequer, I am bound to say, as an ex-Minister of Works, is an ever-present trouble to all of us. There are certainly six Ministers 609 here, all involved, none of whom appears to me to have the power to co-ordinate the others or to direct them, and this is probably one of our basic problems in getting any intelligent, long-term policy for the industry.
There is probably a case here for a Minister of Aeronautics or Minister of Aviation., call him what you will, who could be responsible for users' policy, whoever the users are, who could be responsible for research and development policy, for Government strategic policy, for export policy and credits. I am not prepared to assert—it would be ridiculous to do so from this side of the Committee—that this is so, but I am certain that it is no use the Minister of Supply merely smiling in a superior way—
§ The Minister of Supply (Mr. Aubrey Jones)indicated dissent.
§ Mr. Brown
—because it is clear that the present situation is bad. If there are strong compelling arguments against a Minister of Aeronautics, there must be some improvement in the present situation, some effective co-ordination of the Ministries now existing; or, perhaps, some of the functions can be merged.
Secondly, there must be some arrangement from outside for two-way advice, both to and from the industry and to and from the Government, on policy and its effect on the industry, on the state of the industry and its relevance to policy. At the moment, that is not coming from anywhere in any authoritative or acceptable sense. We have suggested before that something like the Iron and Steel Board might be a way of getting this done. Certainly, there is a great need for some such council or board which could fill what appears to be a great gap in the present position. So far, we have had no real argument from the Ministry of Supply that it really believes that this work is being done by the Ministry now. Whenever I suggest to my friends in the industry that it is so, they give a hearty, horse laugh at the idea entering anyone's head.
Thirdly, we must accept the fact that further public funds to support the industry are inevitable. Obviously, we cannot not have an aircraft industry. That, by definition, is ridiculous. On the other hand, we cannot go from a position where 610 85 per cent. of the £3,500 million has been spent on ordinary aircraft over to military orders, and a lot of other public money as well; we cannot go direct from that and ignore the fact that, even in the course of four years, the cost of the projects is likely to be a lot higher in the future than in the past, which brings clearly home the point that public finance will inevitably be involved in the industry.
What I do not believe is that we shall ever have an acceptable situation where there will be merely public money standing behind a private industry over which we have no effective control, and in which we have no effective interest. It means, therefore, that we must have an effective partnership between the State and the private industry if we are to make this rather difficult situation work.
At present, Ministers have taken refuge in what, with respect, is humbug, in saying, "We will help the industry over the next year or two, and then gradually the burden will be shifted from us to the industry and gradually the industry can itself take on the job of financing development and research." I do not believe that that is a picture of what will happen or of what can happen. That is just dodging the problem.
When I talk to the better and younger men in the industry they understand this well and they accept the implications. I had many talks just before this debate, in preparation for it, with some of the younger executives, administrators and technicians in the industry. In no sense do they pretend that either they can find the money themselves or that, in coming to us for it, they can expect to have the whole show to run themselves when they get the money.
They realise that the industry must contract and rationalise into larger units. They recognise that it cannot itself finance the new projects. They realise that they are absolutely dependent on Government policy and Government support, both to establish the job they are to do and to enable them to do it. Further, they recognise that the day of individual private enterprise, started and run by the pioneer airmen, who were imbued with the mystique, is no more, even if it ever really existed.
They realise that there is no stigma in State and private initiative working as 611 a partnership, in combination. The Minister of Transport and Civil Aviation is peculiarly one of those who always seems to me to stumble whenever he has to pronounce the words "public enterprise" or "public and private partnership". It has a very disagreeable effect on the right hon. Gentleman, and I am sure that if ever he gets ulcers that, as much as anything else, will be responsible. I am bound to say that my friends in the industry, on the managerial and technical side, do not suggest that such a partnership would be difficult to accept.
This leads to something we have said before, namely, the greater urgency for the establishment of a top-level inquiry. I mentioned this last year, but I claim no vested interest in the idea. Certainly, the hon. Gentleman the Member for Macclesfield (Sir A. V. Harvey) and many of my right hon. and hon. Friends have put forward some such idea. We really need such an inquiry because, for some people, the decision is politically inconvenient, and because it is a decision of far-reaching importance and will create something of a pattern.
So I advocate a top-level inquiry of distinguished people who know the industry, and also of others who know the circumstances outside it, who know something about Government policy and how it is arrived at, who know something about other forms of industry and about running them. If we pick the right men we can get a decision, and get it in not too long a time.
I urge this strongly. The idea was not dealt with by the Treasury Bench last year. They have had a year to think about it. Clearly, they have not been able to do it themselves. I suggest that it deserves more than a casual tossing aside this year. Such an inquiry would consider the problems and requirements of the industry, the means of meeting them, the way of bringing Government policy and those needs together. A man like Lord Hives, though not a Socialist, would be an excellent chairman and would help enormously.
To me, it is incredible that the Government should be as complacent and as Micawberlike as they are. The Minister of Supply appears at the Dispatch Box opposite wringing his 612 hands, sounding every bit like Micawber waiting for something to turn up every time he answers Questions. He is willing to hurt, but unable to help. He does not mind saying that the industry is in a sad state. He does not mind saying that it gives no satisfaction to anybody. Hurtful things may have to be said, but they should not be said without being accompanied by an obvious means of helping the industry out of its present situation. The Government are very insensitive to the fears of both the workers and the technicians and they are deaf to the pleas and advice of those who have experience of the industry.
If one considers the new problems, added to all the old ones which must be dealt with, and can only be dealt with by the Government, there is the question of supersonic transport. The Minister of Defence wants a decision made about the supersonic bombers, from which he has been retreating. The issue of supersonic transport is knocking about, and as long as it is knocking about someone will hope to get a contract for it. And, of course, someone will keep a team of workers together in the hope of getting the contract and making money.
There is the question of missile production. What are we to produce here? What kind of an industry is it to be, shall we need an aircraft industry in its old shape, or a more electronic industry in which the air frame is of much less importance? There is N.A.T.O. interdependence and American pressure. This is really a Government responsibility. If we are not to be beaten right out, a Government decision is needed.
There is the question of fares policy. Many people have said that we should concentrate on the intermediate range and not try to get into the blue riband range of air transport. All this is wrapped up with air policy and differentials, and how far the Government are prepared to go, and how far the Commonwealth can operate. This is, again, something for which there is no substitute for a declaration of Government policy, which we have not had so far.
There is great need—and I hope that that need will be met today—for a clear statement to the workers in the industry as to what redundancies they may expect 613 and how they will be dealt with. They need to know what provision is being made for their work, and what compensation they are likely to get if redundancy hits them. All these things are hanging about in the wind, and there is little hope that anything will emerge today. It would be so nearly a death-bed repentance on the part of the Treasury Bench that it would be extremely optimistic and foolish to expect it.
I would like to give three assurances to the industry, to the country and to the House. Labour, after November, will establish this top-level inquiry. We will see that Government policy decisions dealing with the issues I have raised on both the military and the civil side of the industry are clearly and unambiguously laid down. We will support a more efficient industry to do this vital job, but on the basis of a real partnership between the State and private enterprise.
§ 4.32 p.m.
§ The Minister of Supply (Mr. Aubrey Jones)
The right hon. Gentleman the Member for Belper (Mr. G. Brown) opened his speech by taking as his text the extempore remark I made the other day that the state of the aircraft industry could not give rise to satisfaction in anyone's breast. Towards the close of his speech he accused me of complacency and of a Micawberlike attitude. How he reconciles the one with the other, I really do not know.
Had I pretended the other day that everything in the garden was lovely the right hon. Gentleman would have been absolutely right to accuse me of complacency, but I have never pretended that there is not a problem here. Of course there is a problem. My quarrel with the right hon. Gentleman is that his analysis of the problem appears to be too narrow. According to him, the problem just has one origin—the combination of private ownership in industry and a Tory Government. Oddly enough, however, exactly the same problem exists all over the world. It exists in the United States, where the industry is privately owned, and it exists in France, where practically every aircraft firm is virtually nationalised. We have to search more deeply than did the right hon. Gentleman for the cause of the problem.
If I may put a paradox—and all paradoxes are, in a sense, deliberate—I 614 would say that this industry is, in a way, the victim of its own success. The great thing about it is that it is a fast-moving industry. That, after all, is its fascination. But its very progress has exacted its penalties. In the military sphere, the industry, together with the electronics industry, has been responsible for the coming of the guided weapon, and the guided weapon has contracted the market for manned military aircraft. Similarly, on the civil side, new aircraft has followed upon new aircraft at such a pace that the world airlines are surfeited and their finances are strained. As I say, this problem is not unique to this country but is common to the whole world, although there are, I agree, special features appertaining to this country, with which I shall try to deal.
If this is the problem, I hope that we can all accept at the outset that there is one inevitable consequence. It is that in this situation the industry is over-large to the present and prospective volume of demand. That is why, as Question Time succeeds Question Time, hon. Members ask me about the aircraft firms in their constituencies. I cannot bring orders out of the hat. There is no magic that one can invoke to deal with this situation.
The broad, inescapable fact is that there must be some degree of contraction in the industry. We can argue about its degree, and I grant freely that we must do everything we can to abate the contraction and to smooth it. In fact, however, the contraction has not given rise to such difficulties as the right hon. Gentleman represented. The number of people made redundant over the past year is roughly 10,000, and of those 10,000 all but 500 have found other work. In other words, out of 20 people made redundant 19 have found other work.
Nevertheless, the broad fact has to be accepted that some contraction is inescapable, and I suggest that our objective must be a more limited one. That objective must clearly be to maintain a strong central core in the industry—a core of firms that can play a leading part in the technological momentum of the industry and withstand the shocks that that momentum brings with it.
In last year's debate on these Estimates, I described two strands of policy 615 to this end. The first was to maintain aeronautical research. It has been maintained. The broad volume of aeronautical research over the last few years has been unchanged. The second strand of the policy was, by the way in which contracts were placed, to strengthen individual units within the industry.
Despite everything the right hon. Gentleman has said, progress has been made in this direction. There is the fact, for instance, that the Hawker Group has fused the resources of its constituent firms. There is the fact that the Bristol Engine Company and the Armstrong Siddeley Company have come together. There is also the fact, announced only the other day, that Westland and Saunders-Roe have combined their helicopter activities. This is a strengthening of individual units, and it is progress, although I would hasten to add that more needs to be done.
I do not want today to traverse the same ground which was covered last year. The question I should now like to ask is this: what farther needs to be done, and, in particular, is further Government financial support all that is required? I thought the right hon. Gentleman a little ambivalent on the question, although I do not think that basically I quarrel with what he said. I am the first to say that Government finance is terribly important to the industry. There is not an aircraft industry in the whole world that can exist without Government finance. On the other hand, I do not think that inadequacy of Government finance is the real problem here, and I am concerned lest too much emphasis on the alleged inadequacy of Government finance may not, in fact, obscure the real problems. We do not want to get into a situation where more Government finance will merely prove a palliative and gloss over and leave untouched the more fundamental problems. If that was the point of view of the right hon. Gentleman, I do not differ from him.
These are the questions which I should like to try to answer and, in answering them, first to consider military aircraft and, secondly, civil aircraft. I take them in that order because the problem of military aircraft is much simpler than that of civil aircraft.
616 Interestingly enough, despite the 1957 Defence White Paper, the volume of work on military aircraft over the last two years has remained unchanged. Although there has been much misrepresentation of the 1957 White Paper, it must be accepted that there will be further manned military aircraft, in particular for the rôle of Army support, and that is what the TSR2 is. Military aircraft are Government supported. The finance for every military aircraft comes from the Government and, by and large, the investment has paid off. The export figure of £150 million which the right hon. Gentleman the Member for Belper mentioned represents 40 per cent. of the output of the aircraft industry. That is a creditable achievement, and 50 per cent. of those exports are military aircraft.
Apart from the general figures, there are such individual successes as the Hunter, the Canberra and, of late, the Orpheus engine. However, I do not wish to stand at this Box and merely relate achievements. If I did that I should be failing in my duty.
In the case of military aircraft, there is a recent problem of some significance which the right hon. Gentleman the Member for Belper did not mention. It is the inroad which American equipment has been making in the European market. In the last year the Germans have taken the American F104 fighter. The French have taken the American Pratt and Whitney engine for their strategic bomber, and Continental countries appear to have decided to adopt the Hawk surface-to-air missile. In none of these cases can it be said that the British product on offer was inferior. In some cases, it was technically superior.
Nor can it be said that the cause of this American inroad into the European market is niggardliness on the part of Her Majesty's Government. This was the suggestion made by the hon. Member for Lincoln (Mr. de Freitas), who, taking up one or two Press references after the Paris Air Show, questioned me about charges made by Her Majesty's Government when lending military equipment for display abroad. Whatever those charges were, the sin attributed to the Government is here negligible in proportion to the magnitude of the event.
617 There is something much more significant operating here, and we must ask ourselves what it is. The explanation that I offer is that the United States are immense givers of financial and military aid to the Continent of Europe. We all welcome that, but military and financial aid is not something intangible and gossamer-like; it consists of hard solid products. The European countries are taking American equipment because they see attached to that equipment some form or other of incidental aid. This is a fact which we have to face.
§ Mr. G. Brown
Would the right hon. Gentleman say what planes we had on offer in place of which the F104 was chosen?
§ Mr. Jones
I maintain that we originally offered a technically superior aircraft in the P177. The aircraft was later cancelled.
The point that I am trying to make is that if American equipment is making inroads into the European Continent it is not because of any niggardliness on the part of Her Majesty's Government towards the aircraft industry. It is a reflection of the fundamental disparity between the strength of the United States and ourselves as a country.
What can we do about it? There is one thing that we must do. At the outset of a project we must seek to consolidate our market with that of the European Continent. In other words, where practicable and feasible, which may not always be the case, we must align our specification to that of the European countries. This is what we are trying to do in the case of the Hawker vertical take-off fighter. This is a project of immense promise, for which I am placing a design study contract.
If in this way we seek a consolidation of the market with the European Continent, clearly there must be some give and take. If they enlarge the market for our products, we in turn must offer an enlarged market for theirs and there must be some sharing of the work. It is important for the whole of the Western Alliance that European countries should be in a position to construct expensive and complicated military aircraft. They cannot do so without a consolidated market.
618 For this reason, I should be glad if aircraft and aero-engine firms in this country took the initiative in forming links with their opposite numbers on the Continent. If they desire my help in this, it will be at their disposal whenever they want it.
§ Mr. Mikardo
Will not some difficulties be created in that objective by the fact that a number of European countries are linked together in the Common Market and we are outside it?
§ Mr. Jones
Yes, I would not question that. All I am suggesting is that, whatever arrangements may exist in the field of trade, defence arrangements are something apart and different and we must have an eye to what I have said about defence arrangements. That is all I wish to say about military aircraft.
I now turn to the much more complicated problem of civil aircraft. What I should like to do first is to lay before the Committee certain facts and give a purely factual account. Having done that, I will then describe what seems to me to be the problem that emerges. I suggest that the problem is on an entirely different scale from that suggested by the right hon. Gentleman the Member for Belper.
The Viscount, which has been supported by Government finance, has been a tremendous success. Approximately 400 of these aircraft have been sold, which is a brilliant achievement. Then there is the Britannia. This aircraft was not started under a Conservative régime but under the régime of hon. Gentlemen opposite. The Britannia has received Government finance to the tune of £20 million for its airframe and its engines. It is a beautiful aircraft. It had its teething troubles, but what aircraft has not? It has overcome them, and it is a beautiful aircraft. [HON. MEMBERS: "Too late."] May I remind the hon. Members that at the moment I am stating the facts. We will try in a moment to draw a lesson from the facts.
The number of Britannias sold is eighty, and eighty is not enough to allow the firm to break even, let alone to make the aircraft a commercial success. I think that in all these cases one ought roughly to reckon that a hundred is the breakeven point.
§ Mr. William Shepherd (Cheadle)
My right hon. Friend said that eighty is not sufficient. Does that include Government support or not?
§ Mr. Jones
Subject to correction, I think that I am right in saying that it includes the number of Britannias bought for R.A.F. purposes.
Next we come to the Comet. I am not sure at what point of time this was started. Once again, for the Comet the Government have invested just under £20 million in both airframes and engines. It is a brilliant pioneering feat which everybody has acclaimed. The number ordered is thirty-three, which is far from the break-even point.
I come to the Vanguard. The Ministry of Supply is contributing to the cost of developing the engine for the Vanguard, but not to the cost of developing the airframe. Two prototypes of the Vanguard are flying and the performance is considerably above the paper promise. Nevertheless, the orders for the Vanguard at the moment total forty. At the moment, we are far from the break-even point.
I come to the VC10. Again, the Government are contributing no finance towards the airframe, but they are contributing to the cost of developing the engine. The number ordered so far is thirty-five, which is far from the breakeven point. I would only add that in both of these cases the private venture of the airframe was not imposed on the company by the Government. It was voluntarily accepted by the company in the light of the risks as they then appeared.
Finally, we come to the de Havilland 121. In this case, the Government are contributing neither to the cost of developing the airframe nor to that of developing the engine. The number ordered so far is only twenty-four. I was asked by the right hon. Gentleman to give one or two further facts about the de Havilland 121, and I should like first to explain how it came about that the Government are not contributing financially to the aircraft either in respect of the airframe or in respect of the engines.
The genesis of this story was that there were two contenders for the B.E.A, medium-range jet aircraft—Bristol-cum-Hawker, on the one hand, and the De Havilland Group, on the other hand. In the intensity of the competition between 620 these two quite large groups, there came a moment of time when one of the competitors offered his project without requiring any Government financial contribution. That was Bristol-cum-Hawker. The choice of the customer, B.E.A., on the other hand, inclined to the other competitor, De Havilland.
I as Minister of Supply would not have been doing justice either to the taxpayer or to the other competitor if I had decided in those circumstances to contribute to the cost of developing the De Havilland 121. There might possibly have been a case for doing so had there been in the De Havilland 121 a marked advantage over the other aircraft, but in the absence of a marked advantage this was clearly something which I could not do. There came a later point, therefore, at which De Havilland agreed to do their project without any Government financial contribution.
There was, however, still one further step which I as Minister of Supply had to take. I had to satisfy myself that the promise of a private venture was a genuine promise. In other words, I had to take some care lest I was being exposed to a specious promise—a promise to do the project without Government finance for the sake of getting the contract and then, later in the day, when the commitments had been entered into, the company might come back to the Ministry of Supply—to me or my successors—and ask for a Government contribution. I had to satisfy myself on that score.
In these circumstances, it was decided that the B.E.A. medium-range jet project should be conducted as a private venture. From the moment that the decision was reached of a private venture—that is, no Government finance—I as Minister of Supply had no standing in the negotiations between the customer and the manufacturer, and I have played no part in the discussions between the two on the specifications. Since the right hon. Gentleman asked me the question, my information is that customer and manufacturer are inclining, shall I say, to a specification which is somewhat smaller than the specification in mind some time ago and with a different engine from that in mind some time ago.
These are the facts, which I thought it right to lay before the House. What is the lesson to be derived from these facts?
§ Mr. Frank Beswick (Uxbridge)
I should like to fee clear about the De Havilland 121. Here is an aircraft upon which may well depend the fate of almost the whole of the aircraft industry. Unless we get a machine here which can go into the world market, a large part of the industry will fail. Is the Minister telling the Committee that he has washed his hands of this business altogether?
§ Mr. Jones
The hon. Member has asked me a most important question, to which I shall come in a moment. May I take the argument logically? I wanted first to state the facts. I will now try to see what lessons emerge from the facts.
I should have thought that the first thing which emerges from this catalogue is that no matter whether the Government have contributed financially to the project or not, in each of these cases, the Viscount apart, the trouble is the same; in other words, the sales are too small. This, and not Government finance, is the nub of the problem.
The market is small because of our inherent geographical circumstances. Our operators have a demand which by itself is uneconomic. If, despite this smallness and this uneconomic nature of the demand, the aircraft chosen is ahead of the rest of the world, then, as in the case of the Viscount, we can overcome the limitation of the small home market. If on the other hand, the aircraft is not ahead of the rest of the world, or if, while being ahead of the rest of the world in conception, it is produced slowly, then we are bound down by this limitation of the small home market and both the company and the Government lose their money.
This seems to me to be the essence of the problem. If the right hon. Gentleman set up an inquiry—any inquiry—1 do not think it would describe the problem any differently from the way in which I have described it. The question is, what do we do about it? I suggest three things. First of all, we have to do what we can, despite our natural geographical circumstances, to enlarge the market. Secondly—and this refers to the question posed to me a short while ago by the hon. Member for Uxbridge (Mr. Beswick)—we have to ask ourselves, are we pursuing the right method of choosing aircraft? Lastly, we have to secure quicker production. I do not propose 622 to say anything about that, but I will say that this mystical and most misconstrued word "rationalisation" has had no other objective than the creation of units which can produce fast.
I should like to say a word about the other two points, enlargement of the market and the method of choosing aircraft. We must do what we can to combine military demand with civil demand. This is what I am currently trying to do in the case of the Rotodyne. I am entering into negotiations with the company with a view to placing a possible military order for the Rotodyne. Whether there will be an order must depend on the outcome of the negotiations, and the Government must be satisfied about the specification, the cost and the date of delivery—in other words, quickness of production. Subject to satisfactory negotiations, there will be a military order for the Rotodyne to add to the civil order, and I should have thought that much more valuable to the company than any direct Government contribution to the cost of development.
Equally, this is what we are doing in the case of the Argosy. It is a private venture civil freighter. We have not put out a special specification for a military tactical freighter. We are adapting the civil aircraft for military purposes, again with a view to combining the military and civil markets.
§ Miss Elaine Burton (Coventry, South)
The Minister will probably have seen today's Manchester Guardian. He will remember that when the three hon. Members who represent the three Coventry divisions saw him on the question of a contract for the Argosy, he was courteous and gave full details which we took back to Coventry. But when we discussed the matter with shop stewards and workers, they were not convinced that the delay which ensued from the Ministry in placing these orders would obviate subsequent unemployment. Today, the Manchester Guardian carries the story that Armstrong-Whit-worth Aircraft Ltd. will have to dismiss 240 skilled fitters in September because of this delay. Can the Minister help us about that? If he should say that men who have already been dismissed have got other jobs is he aware that they have not got jobs comparable with their skill?
§ Mr. Jones
I will try to help the hon. Lady as best I can. As I said the other day, negotiations for the Argosy contract are well advanced, but I think the problem is that employment takes some time to mature in the case of an aircraft. The firm is already acting on the assumption that a contract is to be placed, but the initial work is mostly for technicians and only at a much later stage is a large volume of employment engendered. I think that with the Armstrong-Whitworth aircraft the redundancy is not because of any delay but because employment in connection with aircraft can, by the nature of things, mature only at a later date.
Lastly, this is also what I am trying to do in the case of the Britannic, combining the military with the civil market. The right hon. Gentleman asked why it was that the Britannic aircraft was chosen. I will tell him. It was for two reasons. The first was that alone of the aircraft offered by manufacturers to Her Majesty's Government the Britannic had an unobstructed fuselage. In the others, there was an obstruction in the fuselage and the accommodation was divided into two holds. In the Britannic there was an unobstructed hold. In addition, the volumetic capacity of that hold was greater than in any other aircraft on offer. In other words, it had a better carrying promise than any other aircraft.
There was another factor in the mind of the Government, I will not say a reason, but a factor. I think that it was on 8th December—I can never read dates on telegrams—that I received a telegram from Northern Ireland which read as follows:Following talks with workers here I very much hope the Britannia freighter contract will be given to Short's thus preventing already serious unemployment position being greatly aggravated.That came from the right hon. Gentleman the Leader of the Opposition.
§ Mr. G. Brown
Let us get this clear. There was a telegram from my right hon. Friend asking that work should be placed in Northern Ireland. It did not tell the right hon. Gentleman which aeroplane to produce.
§ Mr. Jones
Not for the first time it would appear that Her Majesty's Government and the right hon. Gentleman the Leader of the Opposition are in unison against the party opposite.
So much for the enlargement of the market. Now I come to the method of choosing the aircraft, and I think this the most difficult and delicate matter of all. We should all start from the presumption that when an aircraft is chosen the customer has a claim to freedom of choice. He knows what he wants and he is entitled to choose his aircraft and his own contractor. That has been the practice over the past eight years, I believe, in respect of all the aircraft I have mentioned, with the possible exception of the Viscount. Indeed, when last year I made a statement to the effect that normally—always admitting exceptional cases—the Government would expect a firm to develop aircraft out of its own resources, what lay at the back of that statement was a desire to allow customers full freedom of choice.
The moment that the Government are asked to invest money in a project, to contribute to the development of a project, clearly they must ask themselves, "Is this the right aircraft? Is this an exportable aircraft? Has the contractor the customer wishes to choose a command over a large export market?" In those circumstances, the customer can no longer have unquestioned and unqualified freedom of choice. To allow the customer complete freedom of choice of aircraft and contractor in those circumstances, when Government money is invested, would mean that the investment of Government money was directed, not by those responsible to the taxpayer, but by the customer, and surely that is quite inadmissible.
We have, therefore, a choice of courses. I do not think it is for me to indicate what the choice should be, but I am anxious to lay the alternatives clearly before the Committee. Here we have an inexorable choice of courses. On the one hand we may allow the customer full freedom of choice, with 625 its corollary that there is no Government contribution to the cost of developing the aircraft. On the other hand, if we say that a Government contribution is necessary for the development of the aircraft, then the Government must have some say in the aircraft chosen, and in the contractor chosen. In those circumstances, the choice must be the outcome of a partnership, a joint consideration between the customer, the industry and the Government.
In this very difficult and intricate matter, this is the most important question which concerns us. Which method do we choose? I do not wish to propound any views today, but I ask those outside who are interested in the problem to address their minds to this question. I should welcome any views which hon. Members might wish to express today.
I have looked at the problem of the aircraft industry in general as it obtains throughout the world, and have tried as far as I can to analyse the problem which we have in this country in regard to both military aircraft and civil aircraft. Before I sit down, I should like to say a word about the future. I have no doubt in my mind that the technical momentum of this industry will continue and that in about ten years—about a decade hence—the world will be entering upon supersonic civil travel. I think all of us would hope that this country, which has played a great part in aeronautical pioneering, can play a part in supersonic flight. What part it is a little early and premature to say at the moment, but certain things are clear.
After I received, some time ago, a report from a committee representative both of my Department and the industry, I sought the views of industrial managers on this question of supersonic civil aircraft. From the answers I have received, it has become reasonably clear that nobody believes that a medium-range supersonic aircraft would be an economic proposition, but that supersonic flight for the moment must be developed for long range distances rather than for medium range distances. It is equally clear that the minimum speed of such supersonic aircraft must be twice the speed of sound. That, at any rate, is clear.
626 We are not at the moment in a position to make a definitive decision, but I have the consensus of industrial opinion with me in saying that the next task is detailed design work by industry, and I am now urgently considering how and in what way that work can best be placed. Quite apart from following technical innovations for the sake of technical innovations, if I may express a personal view, it is that innovations should be sought with an eye to making flying available to the mass public. Supersonic flying will probably be costly, and however much supersonic flying there may be, there will always be subsonic flying, for which there will be a large demand, and we in this country should seek after innovations which can cheapen the operating costs of aircraft.
I think the broad question which this debate poses today is that of the volume and kind of Government support for the industry. I wish to leave the Committee in no doubt that the Government must support the aircraft industry.
§ Mr. Jones
No, no. The hon. Gentleman in that remark is ignoring all the qualifications which I have tried to make throughout my speech. What I am saying is that no aircraft industry can subsist without a measure of Government support, and that support is merited to my mind for one reason, because the aircraft industry is now in the technological van.
I do not know how many hon. and right hon. Members have read Mr. Nehru's Discovery of India, but the theme which prompted him in writing it was this. Here was his country, with an ancient civilisation, having absorbed and assimilated one invader after another, and yet, after many centuries, it suddenly succumbs to an alien civilisation from the West—our own. He asked himself why this was, and the answer to which he came was that the Hindu civilisation had fallen behind in technique. I think there is a profound truth in this.
We commonly identify civilisation with moral values, aesthetic accomplishments and so forth, but, in fact, one of the main pillars of any civilisation and any culture is technique, and in this 627 country the aircraft industry is one of the main pillars of our technique. That is its claim to support, and, if I may answer the hon. Gentleman who interrupted, that support must be subject to this qualification. The purpose of support must not be to shore up the weaknesses of the industry. The object of the support is to reinforce the industry at its points of strength.
§ 5.16 p.m.
§ Mrs. Eirene White (Flint, East)
I do not very often intervene in these debates, because I am fully aware that there are hon. Members on both sides of the Committee who have greater technical knowledge and greater experience than I have myself. I try to make it a practice not to inflict on the House or Committee a speech on a subject which I have not had time or opportunity to study.
This crisis in the aircraft industry in this country has been brought home to me because there is in my constituency a very large aircraft establishment of Messrs. De Havilland—their second largest establishment—where there are upwards of 5,000 workers. For the last few months, the problem of this industry has been brought home to me so emphatically that I have not been able to refrain from seeking to take part in this debate today.
The Minister has said that this is a fast-moving industry, and he also said, I think quite rightly, that it is only when we are ahead of the world that we, with our naturally small home market, will be able to achieve success. I should like to say to him that I agree entirely with both those sentiments, but that surely the corollary is that we should also have some fast-moving thinking on the part of the right hon. Gentleman himself and of his officials to keep pace with this very rapidly changing industry. With the experience that we have had with his Department over two aircraft with which De Havilland's were concerned—the Comet and the DH121—I am convinced that there is very little hope for the future health of the industry if we have to rely on the kind of attention given to those two aircraft.
I should like to say something about the history of the Comet. Everyone acknowledges that it has been a pioneering 628 achievement of very considerable value. Everyone recognises the setback in the disaster to the Comet I, and everyone also recognises the help given to the firm by B.O.A.C. on the financial side and by the Royal Air Force in development flying and in using the Comet II. On the other hand, one cannot possibly be satisfied with the position in which, as the right hon. Gentleman himself said, the present orders for this aircraft stand at only 33, a figure far below anything required to make it an economic proposition.
I should like to put it to the right hon. Gentleman that this position was not entirely unforeseeable, and to ask him just what thought was given to his own recipe for enlarging the market, in which he said that there should be consideration of the possible dual use of these aircraft for civil and Services purposes. When it was first realised that the orders for Comet IVB were not coming forward with any speed, I went to see the officials of the company at the end of last year. I had had the pleasure of flying back from New York in the first Comet made at Broughton. Those officials told me that they were still hoping that there might be orders for Service purposes for the Comet IVB. An hon. Gentleman opposite shakes his head. I am simply saying what was told to me at that point of time.
When, following that, I saw the Parliamentary Secretary with the officials of his Ministry, I asked them what consideration had been given at any stage to the possible dual-purpose use of this aircraft. They indicated that no consideration had been given to it and that it was then too late to do so because the design was settled and, for various technical reasons, nothing could be done at that late stage. That was one reason why the scale of production of this aircraft is restricted. Its use for the Services appears never to have been discussed.
The other restriction is a financial one. Very late in the day it was decided that the Comet was not entirely suitable for all the purposes of the B.O.A.C. and they proceeded to order an American 'plane, the Boeing 707. I would ask the Minister if he is completely satisfied that such a decision was justified and whether the decision should be persisted in. Can he really sit back and say that although 629 only 33 Comets have been ordered the Government propose to do nothing more about it? Is not the right hon. Gentleman concerned about these purchases by the B.O.A.C. and the very considerable expense in dollars on a different type of aircraft? Admittedly this aircraft has advantages, but are the advantages of the Boeing 707 so great that they entirely displace the disadvantages of having such a very small and uneconomic order for the Comet?
I must put it to the right hon. Gentleman that the present situation of the Comet is extremely discouraging to the workers concerned. They put it to me not only that with a larger output the overheads would be relatively less, but that they themselves, in their work in the factory, could then speed up enormously the time taken in production. I have a copy of the latest De Havilland house magazine in which it is stated that the workers at Broughton have established a record—a "track record" they call it—of 11 weeks for Comet production, which I believe is a pretty good achievement.
§ Mr. David Price (Eastleigh)
Is not the hon. Lady aware that the Comet is hardly a trans-Atlantic aircraft and that it is only by the attachment of two extra fuel tanks to the ends of the wings that the Comets are able to make the Atlantic crossing, and that, on the other hand, the Boeing 707 is a larger and infinitely superior aircraft? Did the De Havilland people tell the hon. Lady that?
§ Mrs. White
As far as I understand it, the Comet has something which is on the wings while the Boeing has something under the wings.
I have the permission of Sir Miles Thomas, the former chairman of BO.A.C. to quote him as saying that the design was discussed of a larger version of the Comet, but was turned down.Had that been accepted"—I am still quoting from Sir Miles Thomas—we would have been in a very much stronger competitive position with the Boeing 707.Through some lack of foresight it was lost and we are now left in this lamentable position where we have an aircraft which is agreed to have been a technical 630 achievement but which is frankly a miserable commercial failure.
Part of the responsibility for this position rests upon the shoulders of the Government. They cannot sit back complacently—I use the word advisedly—and allow this achievement of British aircraft designers to go by the board through lack of foresight and adequate planning. If the Government are taking on responsibility for the aircraft industry, a situation of this kind cannot be left entirely to the private firm concerned. I still believe that it would be in our interests, even at this late stage, to concentrate more on the Comet and even, if necessary, to take steps about the Boeing 707 order.
I say that with this in view: how far does the Minister consider that the Government should never intervene as between the aircraft industry and the civil airlines? Is he really satisfied that he should leave it entirely to the civil airlines to decide what the British aircraft engineering industry is to do? Choices have sometimes to be made which cannot necessarily be made simply from the point of view of the customer, as the right hon. Gentleman said, or even necessarily from the point of view of an individual aircraft firm. The right hon. Gentleman must appreciate that if we buy an aircraft it does not stop there but goes on to the purchase of the subsequent spares. The transaction, from that point of view, takes on a different pattern.
I can only say again that the experience with the Comet IV and the Comet IVB is disturbing and distressing and that the workers in the industry feel that it ought not to have been allowed to arise. It cannot be explained simply by the admitted delays and difficulties following mishaps with the Comet I. There seems to have been a complete misunderstanding by the firm of the Government's intentions. They supposed that, because the Comet II had been used for R.A.F. transport, it would more or less automatically follow that something would come along for the Comet IVB, but this did not ensue.
I would now turn to the other aircraft which, when we first became apprehensive about the fate of the Comet IV, we were told would come on rapidly 631 after the Comet IV and that we need have no qualms about continuing employment and production. In December, I was told about the work on the D.H.121, which should have gone through its preliminary stages in Hatfield and so reach the North Wales factory by the end of this year. It seems obvious at the present time that this cannot happen. Again, some of the responsibility for the delay seems to me to rest with Her Majesty's Government. They put finance first. I am not clear whether they were more concerned with the Comptroller and Auditor General than—
§ Mrs. White
I do not know. Considerable criticisms were made by the Select Committee about delay in settling this question. From the answers given before the Select Committee, it was clear that the financial aspect of the matter would be responsible for upwards of six months' delay in production, quite apart from the other delays which are now taking place on specifications.
§ Mr. Aubrey Jones
Perhaps the hon. Lady would like to know that after De Havilland's had agreed to do this project without any Government contribution, approval to go ahead with the DH121 was given less than two months later.